Switzerland’s
Financial Market Supervisory Authority (FINMA) conducted an in-depth review of
the money laundering risk analyses of over 30 Swiss banks during the spring of this year and found that many did not meet the basic requirements for such an analysis. The Swiss watchdog
in a statement explained that it was prompted to conduct a deeper examination
after it “repeatedly identified shortcomings” in the measure among banking institutions
during its on-site supervisory reviews.
In some cases, FINMA found the lack of an adequate definition of money
laundering risk tolerance, which forms the limiting framework of a robust risk
analysis. The regulator also found “a lack of various structural elements that are
prerequisites for a risk analysis.”
To tackle
the shortcomings it found that FINMA had released guidance on money laundering risk
analysis today (Thursday). It noted that the guidance set out its observations and is aimed at
creating transparency about them.
“The money
laundering risk analysis is an important tool for the strategic management of
banks and other financial intermediaries,” FINMA explained. “[Banks] use
this to identify and mitigate the risks in the area of money laundering and
determine the relevant risk criteria for the financial institution’s
activities.”
Additionally, FINMA explained money laundering risk analysis stipulates that money
laundering risks are not within an institution’s risk tolerance.
Important Criteria
According
to FINMA, under the Swiss Anti-Money Laundering Ordinance, Swiss banks must
conduct a money laundering risk assessment that considers both their business
operations and the characteristics of their established business relationships.
Based on these evaluations, banks are obligated to ascertain the implications
for their own business activities.
The ordinance also
requires Swiss lenders to “periodically explicitly prepare” a corresponding
risk analysis at a “consolidated level,” FINMA noted, adding that the Swiss
Banking Act and the Swiss Anti-Money Laundering Act (AMLA) in addition to the ordinance require banks to capture, limit
and monitor their risks as part of
their organizational requirements.
Equiti enters Qatar; Swiss Finance Corp adds LumeFX; read today’s news nuggets.
Switzerland’s
Financial Market Supervisory Authority (FINMA) conducted an in-depth review of
the money laundering risk analyses of over 30 Swiss banks during the spring of this year and found that many did not meet the basic requirements for such an analysis. The Swiss watchdog
in a statement explained that it was prompted to conduct a deeper examination
after it “repeatedly identified shortcomings” in the measure among banking institutions
during its on-site supervisory reviews.
In some cases, FINMA found the lack of an adequate definition of money
laundering risk tolerance, which forms the limiting framework of a robust risk
analysis. The regulator also found “a lack of various structural elements that are
prerequisites for a risk analysis.”
To tackle
the shortcomings it found that FINMA had released guidance on money laundering risk
analysis today (Thursday). It noted that the guidance set out its observations and is aimed at
creating transparency about them.
“The money
laundering risk analysis is an important tool for the strategic management of
banks and other financial intermediaries,” FINMA explained. “[Banks] use
this to identify and mitigate the risks in the area of money laundering and
determine the relevant risk criteria for the financial institution’s
activities.”
Additionally, FINMA explained money laundering risk analysis stipulates that money
laundering risks are not within an institution’s risk tolerance.
Important Criteria
According
to FINMA, under the Swiss Anti-Money Laundering Ordinance, Swiss banks must
conduct a money laundering risk assessment that considers both their business
operations and the characteristics of their established business relationships.
Based on these evaluations, banks are obligated to ascertain the implications
for their own business activities.
The ordinance also
requires Swiss lenders to “periodically explicitly prepare” a corresponding
risk analysis at a “consolidated level,” FINMA noted, adding that the Swiss
Banking Act and the Swiss Anti-Money Laundering Act (AMLA) in addition to the ordinance require banks to capture, limit
and monitor their risks as part of
their organizational requirements.
Equiti enters Qatar; Swiss Finance Corp adds LumeFX; read today’s news nuggets.