FCC RegUpdate

The Swiss Financial Market Supervisory Authority (FINMA) has released guidance on Money Laundering Risk Analysis, detailing the requirements for banks to prepare an assessment of money laundering (ML) risks. This guidance aims to address shortcomings and enhance transparency through its observations.

According to FINMA, Swiss banks are mandated to conduct a money laundering risk assessment in compliance with the Swiss Anti-Money Laundering Ordinance (AMLO). This assessment should consider both the nature of their existing business relationships and their business operations. Banks are required to determine the implications for their own business operations based on these evaluations.

The guidance outlines the following key points:

  • Banks must establish a risk tolerance for money laundering based on their business activities and the nature of their customers.
  • The money laundering risk analysis should encompass the identification, recording, analysis, and measurement of all ML risks to which the bank is exposed.
  • Banks must individually record whether the criteria listed in Article 13 para. 2 bis AMLO-FINMA are relevant to their business activity or not.
  • The ML risk analysis must be documented in writing, periodically reviewed, adjusted if necessary, and approved by the bank’s board of directors or senior management.
  • For banks with international branches or those operating as part of a financial group, monitoring ML risks on a global level is necessary. This can be achieved through a consolidated risk analysis.