Last year, the Swiss Money Laundering Office (MROS) received a blatant message from one of its foreign partner organisations: two not-for profit organisations were holders of Swiss bank accounts whereby the beneficial owner of the bank accounts was suspected of terrorist activities. But MROS as part of the Swiss Federal Police (Fedpol) could not respond to the inquiry.

"So far, Switzerland may only comply with the request of a foreign authority if a suspicious transaction had been received by a Swiss bank or another Swiss financial intermediary."

MROS was even prohibited from pursuing the information on its own: neither can it make separate inquiries with the banks concerned nor may it pass such information on to the public federal or state prosecutors. The reason for this is Article 11a of the Swiss Money Laundering Act. This provision stipulates that Switzerland may only comply with the request of a foreign authority if a suspicious transaction has already been received by a Swiss bank or another Swiss financial intermediary. If this is not the case, MROS cannot act.

Last year alone, MROS received 4'165 inquiries from abroad, according to the Fedpol's and MROS' annual reports published this week. The number of inquiries has increased to 3'662 notifications last year from 999 inquiries five years ago. In about 60 percent of these cases, the MROS must remain inactive as there is no corresponding notification of a suspicious transaction from a Swiss banks or another financial intermediary in Switzerland. The "Groupe d'action financière", a member of the OECD's international anti-money laundering body, already criticized Switzerland for this its practice in December of last year.

"Art dealers shall have a reporting obligation in the future as well if they suspect terrorist financing."

The Swiss Federal Government therefore plans certain amendments to Switzerland's anti-money laundering legislation in order to fill the gap, whereby the bill to be proposed to the Swiss Parliament goes into the usual consultation process by the end of this year. And a further amendment is planned: art dealers shall have a reporting obligation in the future as well if they suspect terrorist financing.

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