Money Laundering Reporting Office Switzerland
No increase in the number of suspicious activity reports for the first time
Keywords: Money laundering
According to the7th MROS Annual Report published on Friday, the Reporting Office registered a decline in the number of suspicious activity reports in 2004 for the first time. This decline was, once again, mainly due to the field of international financial transactions, the so-called money-transmitters. In comparison to the previous year, the number of reports from the money-transmitter sector alone decreased by 69 or 15%. This decline can be explained mainly by the more restrictive practice and the stricter conditions imposed by the financial intermediaries on business dealings. Likewise, there was a decrease in the number of reports from the fiduciaries (11 fewer reports) and from the asset managers/investment advisors (5 fewer reports).
Preventive effect noticeable
These trends must be observed on a more long-term basis, taking into account that the non-banking sector has now been implementing mandatory due diligence according to the Money Laundering Act for the last six years and this has had a positive effect in that the financial intermediaries have become more diligent in selecting their clients. Financial intermediaries can put their reputation at considerable risk by becoming involved with illegitimate money, and this factor is clearly a reason why they choose their clients more carefully and sometimes even decline many business relations from the beginning. The financial intermediaries’ conduct has, therefore, helped to accomplish a key objective of the Money Laundering Act, namely its preventive effect.
The number of reports from the banking sector increased once again in 2004 by a total of 38. Apart from an increase in other areas, there were more cases of attempted money laundering, which under the provisions of the Money Laundering Ordinance of the Federal Banking Commission dated 1 July 2003 must also be reported. The number of reports from the banking sector also influenced the total of reported assets, which increased by around 25 percent to approximately CHF 772 million.
Review of suspicious activity reports from April 1998 to December 2004
In its 7th Annual Report, MROS reviews for the first time the results of its work between 1 April 1998 and 31 December 2004. On average, approximately 78 percent of all incoming reports were forwarded to the law enforcement agencies who, in about half of these cases, delivered a verdict including decisions on non-admission, dismissal and transferral of cases abroad.
The remaining cases show up in the statistics as pending. There are several reasons for this: on the one hand investigations into complex money laundering cases are time-consuming and often have an international facet, which can lead to long-drawn international legal assistance proceedings. On the other hand it must be assumed that not all cases involving a verdict were reported to MROS since only those involving money laundering, lack of due diligence or membership of a criminal organisation are subject to registration; The MROS is not informed about cases that were forwarded to the law enforcement agencies and that led to a conviction for a different offence such as fraud or embezzlement, so that these cases may appear in the statistics as still pending.
Money laundering verdicts
In its annual report, MROS also published excerpts from a study by the Service for Analysis and Prevention (SAP) at the Federal Office of Police on money laundering verdicts that were reported to MROS between April 1998 and July 2003. The analysis showed that most convictions involved cases of so-called simple money laundering. In approximately 85 percent of these verdicts, the predicate offence involved violations against drug legislation, particularly drug trafficking. Other predicate offences included fraud (6 %), theft (3 %) and corruption (2 %). The sums involved ranged from a few hundred to several million Swiss francs. The proportion of verdicts for qualified and simple money laundering was 1:8.5. Most verdicts for qualified money laundering were in connection with money laundering by rings and/or professionals, whilst there were only a few convictions for membership in a criminal organisation.
Eleven suspicious activity reports of suspected terrorist funding
The number of reports of suspected terrorist funding increased by six in 2004 to a total of 11 reported cases. Once again the reports were mainly based on published lists. The sum of assets involved was 0.12 percent (approximately CHF 0.9 million) of the total amount of assets involved in the reports submitted to MROS in 2004 (approximately CHF 772 million).
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