FINMA highlights AML shortcomings in Swiss banks

After looking into the anti-money laundering efforts of 30 major banks over the spring, Swiss financial regulator, FINMA, has published a new set of guidelines, outlining its findings and highlighting measures Swiss banks must take to improve their protections against money laundering – a longstanding problem in the region. 

The regulator identified several shortcomings during its analysis, including lack of “an adequate definition of the money laundering risk tolerance” and “a lack of various structural elements that are required for an effective and robust risk analysis.” 

FINMA said in a statement: “The money laundering risk analysis is an important tool for the strategic management of banks and other financial intermediaries. They use this to identify and mitigate the risks in the area of money laundering and determine the relevant risk criteria for the financial institution’s activities. The money laundering risk analysis also stipulates which money laundering risks are not within the institution’s risk tolerance.”

A safe haven for criminal funds

Switzerland has a reputation for providing a safe haven for illicit funds, something regulators have been trying to address in recent years. Anti-corruption movement Transparency International regularly highlights the country’s role in criminal financing. 

“One of Switzerland’s largest banks, Credit Suisse, was the subject of the Suisse Secrets investigations by an international media collaboration,” it said l when it released its latest Corruption Perceptions Index (CPI) in January.

“The investigations shed light on the bank’s questionable practices over a long period of time and on dubious clients – from those accused of funnelling public funds out of Venezuela to a tycoon who backed an armed uprising in Libya. While Credit Suisse has faced legal action this year in a separate case of money laundering, Swiss authorities need to do more to promptly identify and sanction failings in the banking sector. What’s more, banking secrecy continues to hinder Swiss journalists from investigating and reporting on cases of corruption and money laundering involving Swiss banks.”