Money-laundering investigations rise sharply

The authorities are trying to smoke out the culprits swissinfo.ch

The Swiss authorities say that the number of money-laundering investigations in the non-banking sector rose by 74 per cent last year.

They claim that one of the reasons for the increase is that financial intermediaries are becoming more willing to submit to inspection.

In a report issued on Thursday, the Money Laundering Control Authority (MLCA) – whose investigations target asset managers, trustees and lawyers, among others – said that it had investigated 452 financial institutions in 2004, up from 259 the previous year.

The authority said that it had been able to step up its work because the new Money Laundering Act, which came into force in 1998, was now fully operational.

This law requires all financial institutions – and not just banks – to report suspicious transactions.

“The MLCA’s practice of taking more stringent action against illegally active financial intermediaries is also sending a clear signal,” the organisation said in a statement.

“For the first time the finance ministry issued a fine of SFr40,000 ($33,400) based on a complaint by the MLCA”.

However, far less action was taken against companies or individuals than in 2003.

Two years ago seven institutions were told to cease trading, but none was ordered to close down in 2004.

In almost half the cases last year no legal action was taken at all, even though ten per cent of them involved illegal operations.

Encouraged

However, the authority said it was encouraged by the cooperation shown by financial institutions, who “are voluntarily moving from the shadows into the light”.

Many firms were using self-regulatory bodies or seeking authorisation from the MCLA, said the authors.

They concluded that this process was working and that the supervisory instruments included in the law – which places the emphasis on self-regulation – were effective.

Switzerland has been criticised in the past for not doing enough to fight financial fraud and money laundering.

The government announced in January that it wanted to reinforce legislation to bring it into line with international standards. This would include extending the list of crimes connected with money laundering.

The measures would ensure Switzerland’s full compliance with the recommendations set down by the international Financial Action Task Force (FATF) in 1993.

swissinfo with agencies

Key facts

Investigations in 2004: 452
Investigations in 2003: 259
Increase on 2003: 74%
Number of institutions closed down in 2004: 0
Number of institutions closed down in 2003: 7