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Money laundering reporting

At the end of June, the Money Laundering Reporting Office Switzerland (MROS) published its second annual report covering the period from April 1999 to March 2000. The MROS was set up under the Swiss Money Laundering Act which became effective April 1 1998. Under the Money Laundering Act all financial intermediaries (which includes, inter alia, banks, securities traders, money changers, asset managers etc) are required to report suspicious transactions to the MROS, which after inquiring into the facts then decides whether the case must be passed on to the prosecution authorities.

Compared to the previous reporting period, ie the first year of its activities, the MROS has recorded a substantial increase in the number of reports received and the volume of assets involved. In the second year of its existence, the MROS has received 370 reports involving assets of more than Sfr1.5 billion ($900 million) compared to 160 reports involving Sfr330 million in the previous year. 85 % of all reports were filed by banks. The reporting by the non-banking industry is considered to be below the expectations. A reason for this could be the fact that banks had been involved in money laundering detection before the enactment of the Money Laundering Act, while the non-banking industry is only now getting organized with respect to the fight against money laundering activities. Of the 370 reports received by the MROS in the referenced period of April 1999 to March 2000, two-thirds were passed on to the prosecution authorities. Many of the cases involved offshore companies as customers and a considerable number of Russian nationals as beneficial owners. The MROS reported that media coverage of money laundering or similar cases often triggered reports, eg the transactions involving the Bank of New York or Nigeria's request for judicial assistance in the Abacha case. Of the more than 100 cases which the MROS passed on to the prosecution authorities in the first year (April 1998 to March 1999), about two-thirds resulted in criminal proceedings, all of which are still pending. Even though these cases are time consuming and no final convictions have yet been made, the MROS considers that the deterrent effect helps to enhance Switzerland's reputation as financial centre.

Belser Altorfer & Partner
Tel: +41 1 252 9100
Fax: +41 1 252 9793

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