Combating Money Laundering — MROS to be vested with greater powers
Keywords: Money laundering
MROS is currently not authorized to share financial information with foreign financial intelligence units, because the AMLA does not provide so — a fact detrimental to the efforts made by all interested parties to combating money laundering. While the FIUs of other countries grant each other reciprocity in sharing financial information, they do not share such information with MROS. It is therefore in the interest of Switzerland to enable MROS to participate in the unqualified sharing of information. With more information available, analyses made by MROS would gain in quality. What is more, the measures Switzerland takes to combat money laundering would become more efficient and gain in credibility.
The Financial Action Task Force (FATF), acting as intergovernmental body developing and promoting policies to combat money laundering and terrorist financing, revised its recommendations in February 2012: The FATF recommends that FIUs should be explicitly authorized to also share financial information contained in suspicious-activity reports made by financial intermediaries. The fact that MROS does not share such information has also been criticized by the Egmont Group, an international gathering of 127 financial intelligence units. MROS is a member of this group. Threatening to expel Switzerland from the Egmont Group, Switzerland has been required to amend the relevant statutory provisions to be in line with the practice by the FIUs in other countries.
Amendment of law meets with majority approval
The Department of Justice and Police (FDJP) conducted hearings on the proposed amendment of the Money Laundering Act. Fifty-five participants in these hearings stated their opinions on the amendment. More than half of the participants explicitly approved of the goals of the amendment to bring MROS’s powers in line with international practice and to avoid Switzerland from being ousted from the Egmont Group.
The Swiss People’s Party came out against revising the law — lock, stock and barrel. While not refusing the amendment as such, the Free Democratic Party of Switzerland and several economic associations opposed a number of aspects of the proposed amendment. These objections were taken into consideration in a revised draft version of the amendment, which now, among other things, explicitly provides that MROS must not surrender original documents to foreign authorities.
Obtaining information from financial intermediaries and concluding agreements of cooperation — MROS to enjoy greater powers
Essentially, the proposed amendment aims at enabling MROS to share financial information with other FIUs. In addition, by amending the law, Switzerland has been pursuing a twofold objective: to enhance MROS’s powers both to obtain information and to conclude agreements on the technical cooperation with FIUs abroad.
By enhancing MROS’s power to require financial intermediaries to provide supplementary information to a suspicious-activity report, MROS is to be authorized to obtain information from intermediaries that have not submitted a report themselves but — because findings gleaned from a report by another intermediary so suggest — are presumed to have information in connection with a case under scrutiny. The lawmaker may thus do justice to the needs of the Swiss financial place and, at the same time, meet the FATF’s tightened requirements: to entitle FIUs to require financial intermediaries to provide supplementary information necessary to perform their tasks effectually.
A further objective pursued by the amendment is to vest MROS with the power to conclude agreements, in the form of memorandums of understanding, on technical cooperation with FIUs abroad that without such an agreement would not be authorized to cooperate with their counterparts in other countries. Under current law, power to conclude such agreements rests with the Federal Council. Once MROS has been vested with such power, another one of the FAFT’s requirements will have been met.