Money-laundering monitor says Switzerland has work to do

AP News
Posted: Dec 07, 2016 12:28 PM

GENEVA (AP) — Switzerland has achieved "good results" in fighting money laundering and terrorism financing, but should strengthen its compliance controls, boost scrutiny on the use of cash and share information more with foreign authorities, a leading watchdog said Wednesday.

The Paris-based Financial Action Task Force noted that Switzerland remains a major international financial center, home to 4.1 percent of all global assets under management as of 2014 and represents about one-quarter of all cross-border private banking.

A regular FATF review of Switzerland released Wednesday, the first of its kind since 2005, cited "major initiatives" by the Alpine nation in recent years to limit banking secrecy and "proactively combat tax evasion." It comes as Swiss authorities have cracked down on suspicious or illegal financial activity, including the Malaysian state fund 1MDB and the soccer world governing body FIFA.

"Switzerland's anti-money laundering and counter-terrorist financing regime is technically robust and has achieved good results, but it would benefit from some improvements to be fully effective," the FATF said in a statement.

It said the Swiss financial system faces a "high risk" of money laundering associated with assets linked to crimes abroad, and said Swiss authorities should better examine risks linked to the use of cash. It noted that Switzerland has put in place cross-border "cash inspections," widened the field of terrorism financing offences linked to al-Qaida and the Islamic State group, and improved transparency of people and entities.

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"The things that you see in movies, where Switzerland is the place to go to hide your money ... that is so not the way that it is as far as the authorities work," said Vincent Schmoll, a deputy executive secretary at FATF. "That doesn't mean that there are not challenges."

"The Swiss have put into effect more openness, more cooperation," said Schmoll, who headed the FATF team that visited Switzerland over two weeks earlier this year for the evaluation. "Obviously it's not perfect in every way, but it's working from a system that 20 years ago was quite closed."