Reports of money laundering on the rise

The number of suspected cases rose by more than 50 per cent Keystone

There has been a sharp rise in cases of suspected money laundering in Switzerland.

The number of cases referred to the Money Laundering Reporting Office increased by 56 per cent in 2002 over the previous year.

And for the first time there were more cases reported from Switzerland’s non-banking sector than from the banks themselves. This sector includes lawyers who handle money for their clients and currency exchange offices.

The annual report of the Money Laundering Reporting Office shows suspected cases of money laundering at an all time high.

But despite the increase, the total amount of money suspected of having been laundered is down – from SFr2.7 billion ($2 billion) in 2001 to SFr667 million in 2002.

However, two especially large cases in 2001 accounted for SFr2 billion of that year’s figure, meaning that overall the amount of suspicious money has not fallen as dramatically as first appears.

The type of cases being reported is changing too; in 2001, in the wake of the September 11 attacks, there were 95 suspected cases of money laundering connected with financing terrorism.

These were down to just 15 in 2002, but cases connected to financial services companies involved in the international transfer of funds increased substantially, from 55 to 280.

Here the increase is apparently due to more rigorous control and reporting practices among Switzerland’s non-banking sector.

Effective legislation

The Money Laundering Reporting Office believes the sharp increase in the number of reported cases is an indication that Switzerland’s law on money laundering, which came into force five years ago, is working efficiently.

The law requires bankers and other financial services to report all suspicious transactions to the authorities.

One sign that the Swiss financial community is being extra vigilant in reporting dubious money transfers is that the number of reported cases subsequently referred to the public prosecutor fell from 91 per cent in 2001 to 79 per cent in 2002.

And the money laundering reporting office itself is also working more effectively. Staff numbers have doubled from four to eight since the office first opened five years ago.

Since 1998 only one per cent of reported cases have led to a conviction.

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Key facts

Suspected cases of money laundering rose by 56 per cent in 2002 over the previous year.
But the total amount of money involved has fallen from SFr2.7 billion in 2001 to less than SFr700 million in 2002.
Switzerland’s new law on money laundering came into force in 1998, despite some reluctance among the financial community.
The law requires bankers and other workers in the financial sector to report all suspicious transactions to the Money Laundering Reporting Office, which then investigates them.