by Jonathan J. Rusch
Photo courtesy of the author
For generations, the Swiss financial sector has carefully burnished its reputation as the “perfect home for wealth” and a “financial safe haven.”[1] That reputation, not surprisingly, has led for some time not only to attraction of persons seeking legitimate investment and wealth management opportunities, but to a high degree of money laundering risk.[2]
In recent years, Swiss government authorities have responded to these money laundering risks with necessary changes in its anti-money laundering (AML) laws and general improvements in its legal and regulatory enforcement of those laws. The Swiss Attorney General’s Office, for example, has demonstrated an increasing commitment to holding the Swiss banking community accountable for criminal violations of Swiss anti-money laundering (AML) laws.[3] The Swiss Financial Market Supervisory Authority (FINMA), as the supervisor of the Swiss financial sector, has lately shown increased resolve in imposing significant sanctions on banks that fail to comply with AML laws.[4]
The most recent example of FINMA’s resolve took place on September 17, when FINMA disclosed that it had taken strong AML-related measures against a prominent Swiss private bank, Mirabaud & Cie SA.[5] It stated that in June 2023, it had concluded enforcement proceeding against Mirabaud, finding that Mirabaud breached its AML obligations under Swiss law and “seriously violated provisions of financial market law concerning adequate organisation (governance), risk management and money laundering prevention over a prolonged period.” It also took the highly unusual steps of confiscating CHF 12.7 million of unlawfully generated profits, opening three proceedings against individuals, and prohibiting Mirabaud from accepting any new clients with increased money-laundering risks until compliance with Swiss financial market law has been restored.
This post will explain the background and basis of FINMA’s actions and provide several observations on its significance.
Continue reading →