Money laundering on the increase in Switzerland, mostly in the banking sector

Cases of suspected money laundering in Switzerland are increasing with the majority coming from the banking sector, according to a report from the Federal Police Office.

Globally concerns are still being raised about transparency in the Swiss banking sector which is currently awaiting a more strict set of rules being discussed at a political level.

The number of reported cases of suspected money laundering increased to more than 1,000 last year, an increase of 30% compared with 2009. Most of the increase related to banking.

But the total value of assets involved dropped by more than half to SFr847 million and Judith Voney, head of Anti-Money Laundering Reporting Office (MROS) at the Federal Police Office said that measures in place to combat money laundering are working and the monitoring has become more efficient.

‘The increase can be mainly attributed to two complex cases from the banking sector that resulted in a large number of SARs [Suspected Activity Reports] due to numerous business connections reported,’ she said.

Another factor that may have influenced the statistics is an amendment of the Anti-Money Laundering Act in force since 2009 setting more stringent rules for financial intermediaries, the report points out.

As in previous years the vast majority of suspected cases were submitted by the banking sector, ahead of the payment services sector. Among them were a major bank and a foreign controlled bank suspected of criminal mismanagement and bribery.

The number of SARs involving suspected terrorist financing nearly doubled between 2009 and 2010, up from seven to 13 cases. Ten reports were sent to the Federal Prosecutors Office, which found no hard evidence of terrorist financing in six of them, according to the authorities. None of the terrorist-related SARs revealed any connection to anyone on the official terrorist list, they added.

Last week a Swiss court fined the financial services arm of Swiss Post for failing to detect a money laundering scam. It is the first time a Swiss financial institution has been sanctioned under laws which require a thorough investigation of the origins of suspicious money transfer. An appeal against the verdict is pending.