In 2011, the Money Laundering Reporting Office Switzerland (MROS) registered a significant increase in the number of incoming suspicious activity reports. It received a total of 1,625 reports, an increase of 40% compared to 2010. The total asset value involved also rose to a record sum of over SFr3 billion ($3.17 billion), more than the combined amounts of the 2009 and 2010 reporting years. Including 2011, the number of reports has increased for five consecutive years.
This substantial increase may be attributed to various factors. First, there was an extraordinary increase in the number of reports from the category of money transmitters. One such money transmitter conducted a clean-up of accounts and subsequently submitted numerous transactions retroactively. In addition, multiple reports were generated in connection with only a few but complex cases due to the large number of business connections involved.
Most remarkable, however, was the increase of reports in connection with the developments of the political situation in northern Africa and the Middle East in the spring of 2011. Reports totalling 135 were made regarding persons from Egypt, Tunisia, Libya and Syria, concerning assets in the total amount of almost SFr600 million.
The fact that there was not one report in connection with these states in 2010 again raises the question of the correct definition of so-called politically-exposed persons. Leading politicians may be recognised and welcomed by other states today but declared persona non grata tomorrow. The director of the Swiss Federal Office of Police has told the media that the large number of reports regarding persons from these states was associated with the decisions of the Swiss government to impose sanctions on them and have illicit assets frozen.
The increase of the number of submitted reports in the past five years indicates that banks, which are responsible for most of the submitted reports, have been sensitised to the issue of money laundering. It remains difficult to decide whether transactions in connection with foreign politicians should be reported, however. It can be expected that banks will also in the future only report transactions of such persons if they are widely recognised as politically-exposed persons or the Swiss government has imposed sanctions on them.
© 2021 Euromoney Institutional Investor PLC. For help please see our FAQs.