Recycling in Switzerland: more resources and penalties are needed

Context

TL;DR

• Risks remain high in Switzerland
• The Federal Council takes note of the third report
• The GCRF makes eight recommendations
• More resources and stricter sanctions are needed

Key facts

• Document → third national risk report
• Scope → money laundering and terrorist financing
• Recommendations → eight
• Authorities → GCRF
• Objective of sanctions → «effective and dissuasive sanctions»
• Register → transparency of beneficial owners, in force at the beginning of October

In Bern, the Federal Council took note of the Confederation's report on the threats posed to Switzerland by money laundering and terrorist financing. The document indicates that the Swiss financial center remains attractive for criminals and that the overall level of risks remains high.

The text is the third national risk assessment report on the subject. The diagnosis combines two elements: the national law enforcement system is overall solid, but must constantly adapt to new technologies used by offenders.

Resources, sanctions and organized crime

To strengthen the Swiss response, the GCRF, the Interdepartmental Coordination Group responsible for combating money laundering, terrorist and proliferation financing, has made eight recommendations. Among the priorities is the strengthening of the staff of the authorities involved in fighting crime. The sharp increase in reports of suspected cases of money laundering risks pushing the control system to its limits.

The report therefore calls for additional staff for supervisory and enforcement authorities, more efficient IT systems and sufficient financial resources. A second chapter concerns financial supervision: the ongoing efforts to expand Finma's sanctioning arsenal must continue, with the aim of arriving at "effective and dissuasive sanctions".

The authors then point out the infiltration of organized crime into the legal economic fabric. Criminal networks use Switzerland to transfer funds and penetrate the legal economy; The GCRF requests that the ongoing bill against criminal organizations be submitted to Parliament as soon as possible.

Other recommendations include examining, and if necessary revising, the current Precious Metals Control Act. The GCRF also proposes to continuously monitor the transparency register relating to beneficial owner disclosures, in force since the beginning of October, to check whether it achieves its desired objectives.

Operational details

The practical reading of the report

The operational part of the dossier concerns first and foremost the system's ability to manage reports. The text links the massive increase in suspected money-laundering cases to the risk that the control system will reach its limits. The response indicated is not a single measure, but a combination of personnel, IT tools and financial resources for the supervisory and enforcement authorities.

For those who live or work in Switzerland, the point to follow is therefore the balance between the system's robustness and adaptation to the new tools used by criminals. The report does not present the system's resilience as a definitive result: it considers it sufficient overall, but subject to constant updating.

Five fronts to distinguish

| Area | Signal in the report | Response indicated | | Controls | Massive growth in suspicious reports | More personnel, efficient IT and financial resources | | Supervision | Finma's sanctions arsenal to be expanded | Effective and deterrent sanctions | | Organized crime | Use of Switzerland for funds and infiltration into the legitimate economy | Prompt parliamentary review of the bill | | Precious metals | Need to examine the current law | Revision if appropriate | | Transparency | Register in force at the beginning of October | Constant evaluation of effects |

The table helps avoid confusing different levels. An increase in resources concerns administrative capacity; expanding sanctions concerns Finma's tools; the organized-crime bill concerns instead the passage to Parliament. These are paths linked by the report, but they do not coincide.

The transparency register also requires a cautious reading. The fact that it came into force at the beginning of October is not presented as automatic proof of the result: the GCRF recommends checking over time whether it produces the desired effects. The same applies to the law on precious metals, which the report calls for examining before any possible revision.

The message for the national debate is clear: the robustness recognized today does not eliminate the need to adapt controls, sanctions and regulatory instruments. The recommendations indicate precise directions, while their follow-up remains linked to the competent authorities and Parliament.

Key points

How to follow the dossier without confusing proposals and decisions

The report offers a useful verification sequence for anyone who wants to follow the evolution of efforts to combat money laundering in Switzerland. The reading rule is to distinguish what is already stated in the document from the measures that the GCRF is calling for.

Five verification steps

1. Start with the institutional status. The Federal Council has taken note of the report: this is the step recorded by the source. The eight recommendations, on the other hand, describe the interventions deemed necessary to improve the system. 2. Check operational capacity. The concrete reference is to the availability of personnel in the supervisory and enforcement authorities, the efficiency of IT systems, and the availability of sufficient financial resources. These are the three elements to look for when assessing the response to the massive increase in suspicious reports. 3. Keep financial supervision separate from the fight against organized crime. In the first case, the report discusses Finma’s sanctions arsenal and the objective of effective and dissuasive sanctions. In the second, it calls for the bill to be submitted to Parliament as soon as possible. 4. Follow the two areas of regulatory review. On the one hand, there is the current law on the control of precious metals, which is to be examined and, where appropriate, revised. On the other hand, there is the transparency register concerning beneficial owners, which came into force at the beginning of October: the question indicated by the report is whether it is producing the desired effects. 5. Keep the assessment separate from the outcomes. The source describes a system that is solid overall, but exposed to technological developments and the pressure of reports. Monitoring therefore does not end with taking note of the report: it concerns the implementation of the recommendations and the verification of the register’s effects.

This framework makes it possible to follow the issue at the federal level without attributing to Parliament decisions that the source does not report or treating measures presented as recommendations as already approved. To explore further the relationship between rules and banking operations, consult the guide to conti bancari in Svizzera.

Source: tio.ch