Swiss Money Laundering Reporting Office

Increasing number of reports, with more than half from the non-banking sector

Keywords: Money laundering

Press Release, fedpol, 26.06.2003

Berne, June 26, 2003 - During 2002, the number of reports on suspicious money transactions received by the Money Laundering Reporting Office (MROS) increased by 56 percent compared to 2001. For the first time since MROS was established in 1998, the majority of reports have originated from the non-banking sector. This marked increase and the fact that reports from the banking sector no longer predominate, are due to a change and tightening of reporting regulations on international money transactions.

The steep upward trend in the number of reports on suspicious money transactions continued throughout 2002. Compared to 2001, when a total of 417 reports were sent to MROS, 2002 saw an increase in the number of reports by 56 percent, or a total of 652 reports. While in 2001 the increase was mainly due to major events such as the September 11 attacks, in 2002 the number of reports increased chiefly because of a change and tightening of the reporting regulations applying to money transmitters financial intermediaries active in international money transactions.

The changing and tightening of regulations led to an increased number of reports coming from the non-banking sector for the first time since MROS became operative. In fact, with a share of 56 percent, non-banking establishments accounted for more reports than the banking sector, from which originated a total of 42 percent sent to MROS in 2002. The increase in the number of reports from the non-banking sector is all the more remarkable considering that in the same year, the number of reports from the banking sector did not decline, but rather increased by 6.3 percent compared to the year before (2001: 255 reports, 2002: 271 reports).

Considerable decrease in sum total of assets subject to reports

If the number of reports increased, the sum total of assets involved dropped by 75 percent in 2002. This decrease might be indicative of the effectiveness of the preventive measures Switzerland has taken to fight money laundering. Four years of rigorously implementing the duty of diligence and the obligation to notify have paid off and numerous major money-laundering schemes have been exposed. It is to be hoped that Switzerland has now lost some of its appeal as a financial center for money launderers.

Chief Public Prosecutor's Office responsible for dealing with reports on suspicious transactions

A new bill--the Government Efficiency Bill--took effect in January 2002. Under this bill, the Chief Public Prosecutor has become vested with the power to prosecute crimes provided by article 340bis of the Swiss Penal Code, including money laundering. Before that date, the individual states or cantons alone were charged with investigating money-laundering offenses. With nearly 40 percent of all reports on suspicious transactions investigated by the federal authorities, the workload of cantons such as Geneva, Ticino, and Zurich could thus be greatly relieved after changing procedures in 2002.

Next to no reports on suspicious transactions linked to terrorism financing

While as many as 95 reports submitted in 2001 were made on suspicion of terrorism financing, MROS received only 15 reports on supposed terrorism financing in 2002. All of these communications to MROS concerned persons and institutions that figured on the so-called Bush lists.

The September 11 tragedy clearly accounted for the flood of communications on suspicious transactions in 2001. In the absence of a similar major incidence, however, the decline in the number of communications on financial transactions possibly linked to terrorism financing during the year under review goes to show that Switzerland cannot be considered a center for the financing of international terrorism.

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