A Comparative Guide to Anti-Money Laundering

A Comparative Guide to Anti-Money Laundering

A Critical Analysis of Systems in Singapore, Switzerland, the UK and the USA

Edited by Mark Pieth and Gemma Aiolfi

Topical and pertinent issues addressed in this book include questions such as, has all the recent legislative activity really put a stop to the problem? Are the international rules being implemented as carefully as they should? How level is the playing field in cross border banking?

Chapter 5: Country Report: Customer due diligence in Switzerland

Mathias Pini

Subjects: law - academic, corruption and economic crime, politics and public policy, terrorism and security


Mathias Pini I INTRODUCTION In addition to criminal law instruments, the administrative law area is also significant and self-regulation is particularly important in this area, as mentioned in the previous chapter, ‘Combating money laundering’. Customer due diligence forms an essential part of self-regulation and hence earns a chapter of its own. Customer Due Diligence (CDD) may be described as the concept that aims to reduce damage. It was developed by the banks to address their concerns about the particular risks that face their industry and above all, the risk of concentration in relation to their clients and the risk of reputation. However, this concept was not applied consistently by all banks, so it was only after several banking scandals that appeared particularly threatening to the industry that produced the level of pressure required for action to be taken. With assistance from the Swiss National bank, the concept CDD was developed by the Swiss Banking Association in 1977 which for the first time bound all banks by way of a code of conduct. CDD comprised the so-called five obligations, namely the identification of the contracting partner, and the beneficial owner (Know Your Customer Principle), the possibility of having to repeat identification, the special duty to clarify in the case of unusual transactions and business relations, the obligation to document, as well as the duty to implement organizational measures to ensure that adequate internal systems function to detect money laundering. This corresponds to the arrangement of CDD in the Money Laundering Act...

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