The partially revised Money Laundering Ordinance-FINMA was published

In connection with the revision of the Anti-Money Laundering Act(AMLA), the Swiss Financial Market Supervisory Authority FINMA has partially revised the Money Laundering Ordinance-FINMA (MLO-FINMA). As is known, the Federal Council will put the revised Anti-Money Laundering Act(AMLA) into force on January 1, 2023. The MLO-FINMA will also enter into force on January 1, 2023. The amendments take into account the key recommendations of the Financial Action Task Force (FATF) country report.

Extension of the scope of application to DLT trading platforms (Art. 3 para. 1 MLO-FINMA)

With the concretization for DLT trading systems, the due diligence obligations to be complied with are clarified. This is implemented by extending the scope of application of the MLO-FINMA. DLT trading systems must comply with the general due diligence obligations (Art. 1-20 MLO-FINMA) and the obligations of Title 5 of the MLO-FINMA (special provisions for financial intermediaries pursuant to Art. 2 para. 2 let. abis AMLA and persons pursuant to Art. 1b Banking Act).

Furthermore, FINMA can now also require DLT trading platforms to introduce an IT-based transaction monitoring system if this is necessary for effective monitoring. Transaction monitoring systems are already regularly used by unregulated trading platforms (e.g. Chainalysis). In the future, the effectiveness of transaction monitoring is likely to be further enhanced through the use of AI technology.

Pursuant to Art. 72 para. 2 MLO-FINMA, DLT trading systems must develop criteria that indicate business relationships with increased risks pursuant to Art. 13 MLO-FINMA.

Practical experience is not yet available because no DLT trading system has yet been approved.

Internal directive on checking whether client data is up to date (Art. 26 para. 2 let. l nMwV-FINMA)

According to the Federal Council, the obligation to periodically review and update client data, as required by the FATF, is now anchored in the AMLA. This obligation applies generally and independently of the risk classification of the business relationship. The periodicity, scope and nature of the review and updating of customer data, on the other hand, is risk-based. The criteria for the risk-based, periodic review and updating of client data must be regulated by the financial intermediaries concerned in their internal directives (Art. 26 para. 2 let. l MLO-FINMA).

Increase of implementing provisions on reporting in the MLO(Art. 30 et seq. MLO-FINMA, Art. 22a nMLA-FINMA)

With the exception of Art. 31 and Art. 34 para. 1 AMLO-FINMA, the implementing provisions on reporting have been moved to the AMLO and AMLA respectively. Art. 31 AM LO-FINMA (now Art. 22a para. 2 MLO-FINMA) regulates the preparation of a report with the reasons for not exercising the right to report under Art. 305ter para. 2 SCC in the case of doubtful business relationships with significant assets. Art. 34 para. 1 MLO-FINMA (new Art. 22a para. 1 MLO-FINMA) concerns the obligation to inform FINMA or the supervisory organization about reports to the reporting office concerning business relationships with significant assets. This applies in particular in cases where the reputation of the financial intermediary or the financial center is likely to be affected.

Concretization of the regulatory competence of the SRO-SIA (Art. 42 nGwV-FINMA)

The existing scope of the SRO-SIA’s regulatory competence is now set out in the AMLO-FINMA. The clarification of the demarcation from other financial intermediary activities is intended to create legal certainty, which is welcomed by the Self-Regulatory Organization of the Swiss Insurance Association (SRO-SIA).

Clarifications on the threshold for transactions with virtual currencies (Art. 51a para. 1 bis and Art. 78b MLO-FINMA)

It remains unchanged that a waiver of the identification of the contracting party is only permissible for transactions with virtual currencies up to a threshold value of CHF 1,000 if the transaction does not involve a transfer of money and value (3-party relationship) and the financial intermediary does not maintain a permanent business relationship with the contracting party in question. Outside of this exception, as in the area of fiat currencies, an unconditional identification obligation applies. In particular, operators of vending machines for the exchange of virtual currencies operate in the area of the exception.

The lowering of the threshold from CHF 5,000 to CHF 1,000 came into effect as early as January 1, 2021. This is justified by the high risk of money laundering and because certain criminal networks involved in drug trafficking misused such machines to process payment transactions.

Art. 51a para. 1 bis MLO-FINMA now clarifies the uncertainties existing in practice regarding the calculation of the threshold: the threshold in the amount of CHF 1,000 per month for cash payments or the acceptance of other anonymous means of payment (e.g. cryptocurrencies or certain prepaid cards) for the sale or purchase of virtual currencies applies. The threshold must be monitored by appropriate technical means and compliance with it must be ensured (e.g. via the assignment of transactions to a cell phone number).

If the exchange of cryptocurrencies is only offered in connection with a bank account or a credit card, the threshold of CHF 1,000 must also be complied with, but providers may waive technical precautions.

The financial intermediaries concerned now have until mid-2023 to make the corresponding adjustments (Art. 78b MLO-FINMA).