Newsletter 856: Money Laundering Legislation - Changes as of 1 January 2023

Money Laundering Legislation - Changes as of 1 January 2023

Dear Ladies and Gentlemen
Dear Members

We would like to draw your attention to the fact that the revised Anti-Money Laundering Act (AMLA) and the amended Anti-Money Laundering Ordinance (AMLO) will come into force on 1 January 2023. In addition, FINMA has also brought the FINMA Anti-Money Laundering Ordinance (AMLO FINMA) into force on the same date.

While the AMLA and the AMLO are directly applicable to all financial intermediaries, thus also to VQF members, the AMLO FINMA will only apply once it has been implemented in the VQF SRO regulations and approved by FINMA, which will take place in the first quarter of 2023. The expected entry into force of the amended SRO regulations is 1 April 2023.

Insofar as the AMLA and the AMLO have undergone changes which conflict with the SRO regulations, the legal provisions apply and must be observed by VQF members from 1 January 2023. Insofar as adjustments to the SRO regulations are necessary, these will be made together with the adjustments pursuant to the FINMA AMLO.

The most important amendments are listed below.

Verification of the identity of the beneficial owner (Art. 4 para. 1 AMLA)

Previously, financial intermediaries had the duty to establish the identity of the beneficial owner (or the control holder) with the due diligence required by the circumstances. Now, the financial intermediary is additionally required to verify the identity of the beneficial owner in order to ascertain who the beneficial owner is.

The financial intermediary must therefore in any case verify the information provided by the contracting party on the beneficial owner or control holder on the basis of meaningful information or data from trustworthy sources and document this appropriately. This is a plausibility check. The identity of the beneficial owner does not have to be proven, but must be checked for plausibility. The necessary scope or depth of the additional clarifications and the documents to be obtained is to be determined on a risk-based basis and thus depends on the individual case.

New relationships must be examined according to the new requirements as of 1 January 2023. For existing relationships, the identity of the beneficial owner must be verified during the periodic update of client data (see below).

Periodic updating of client data (Art. 7 para. 1bis AMLA)

A new requirement is the event-independent, periodic verification and updating of client data and supporting documents. The periodicity, scope and type of review are based on the risk posed by the contracting party. A risk-based approach therefore applies, which must be defined and documented by the financial intermediary.

Adjustments in reporting (Art. 9 para. 1quater AMLA, Art. 12a et seq. AMLO)

Art. 9 para. 1quater AMLA defines that a reasonable suspicion exists if the financial intermediary has a concrete hint or several indications that the assets involved in the business relationship are connected with a criminal offence according to Art. 260ter or 305bis SCC, originate from a crime or a qualified tax offence, or are subject to the power of disposal of a criminal or terrorist organisation or serve the financing of terrorism and if this suspicion cannot be dispelled on the basis of additional clarifications.

Art. 9b AMLA provides for a right of the financial intermediary to terminate a business relationship reported to MROS if MROS has not informed the financial intermediary within 40 working days that it will transmit the reported information to a law enforcement agency. The withdrawal of significant assets may only be permitted in a form that allows for further traceability ("paper trail"). The termination of the business relationship and its date must be reported to MROS.

Suspicious activity reporting is also now regulated in Section 3 of Chapter 2 of the AMLO, which is directly applicable to financial intermediaries.

We ask our members to deal with the new legal provisions, to examine the need for action and to implement appropriate measures.

Kind regards

VQF
Financial Services Standards Association