Money laundering fears leap after Arab Spring

Deposed Arabic regimes have tried to run off with cash Keystone

The number of reports on suspicious money transactions in Switzerland received by the Money Laundering Reporting Office Switzerland (MROS) increased by some 40 per cent last year, following the Arab Spring uprisings.

Part of the reason for the increase was a new requirement for Swiss banks and other financial institutions to report shady deals surrounding foreign political events. Last year witnessed social unrest across North Africa and the Middle East, resulting in the downfall of several regimes.

Switzerland has frozen the assets of former dictators, including Egypt’s Mubarak family and overthrown Tunisian President Zine el-Abidine Ben Ali and his clan.

MROS said on Monday that some SFr600 million in suspicious transactions was reported last year in connection with these countries and other Arab states, such as Libya and Syria.

The total number of suspicious activity reports (SARs) presented to MROS increased from 1,159 in 2010 to 1,625 last year. The sums of money involved in 2011 were higher than in the previous two years combined.

Some two thirds of reports came from banks.

More investigations

Just 25 of the reported suspicious cases accounted for SFr2.2 billion in assets while seven cases of suspected fraud amounted to SFr791 million.

The number of reports involving money transmitters – agencies that move money around the world between different parties – quadrupled. Most of these were attributed to just one financial intermediary that last year reported a large number of backdated suspicious transactions.

Reports of suspected fraud doubled in 2011 from the previous year while cases involving organised crime – predominantly Italian mafia – and laundering narcotics money also increased.

However, there were fewer suspicious transactions linked to terrorism than in 2010.

MROS revealed that for the first time in 10 years it had passed on more than 90 per cent of cases to the relevant authorities for criminal investigation.