Money laundering: sharp rise in SARs
The Money Laundering Reporting Office Switzerland (MROS) received significantly more SARs in 2014 than in the previous year. With 1753 reports, the increase amounts to 24%. At over three billion francs, the amounts involved remain high, as the Federal Office of Police writes.
In 2014, MROS received a total of 1,753 SARs, which is the highest number in the history of MROS. The previous high of 1625 reports from 2011 was exceeded by more than one hundred reports.
More than 85% of all reports were submitted by banks. While the number of reports from banks rose by 33% from 1123 to 1495, those from the rest of the financial sector declined. The decline in reports by trustees or asset managers was most pronounced.
Amount reported increased further
The amounts involved increased by 12% to over 3.3 billion Swiss francs in the reporting year. One report exceeded the CHF 200 million threshold, while six other reports involved amounts in excess of CHF 75 million. Together, these seven reports contribute to around one-third of the total amount reported.
The total involved amounts related to reports forwarded to law enforcement agencies is comparable to the figure from the previous year (2.85 vs. 2.8 billion Swiss francs in 2013).
Alleged acts of bribery doubled
In the year under review, the number of reports in which suspected acts of bribery were listed as predicate offenses more than doubled. This is due to a large and complex case in connection with which more than 50 reports were filed. This case was forwarded to the prosecution authorities.
As in previous reporting years, fraud was again the most common predicate offense to money laundering in 2014. The number of relevant reports increased compared to the previous year (448 versus 373 in 2013). Reports relating to phishing, i.e. the fraudulent misuse of an IT system, remained consistently high.
Nine reports of suspected terrorist financing were filed in the reporting year. The situation thus remains comparable with the previous year. Unlike in 2013, when the 33 reports concerned eight individual cases, all nine reports in the reporting year were individual cases.
Strengthening the analytical capacities of MROS
In 2014, 72% of reports were forwarded to law enforcement authorities. The 2014 forwarding rate is thus 7% lower than that of 2013, continuing a trend that has been observed for three years. The decrease in the forwarding rate is due to the fact that MROS is filtering out more reports that cannot be corroborated, which reduces the workload of the prosecution offices. The decline in the rate can be explained by the partial revision of the Anti-Money Laundering Act, which came into force at the end of 2013 and gave MROS the additional option of obtaining information from so-called third-party financial intermediaries. Increased cooperation with foreign counterparties and the prosecution authorities also contributed to this development.
On December 12, 2014, Parliament passed the law implementing the revised recommendations of the Financial Action Task Force (FATF), which is expected to enter into force on January 1, 2016. MROS is directly affected by the changes, as the reporting system has undergone important changes: In the case of suspicious activity reports, assets will no longer be blocked automatically in the future. Now, the financial intermediary will only block the assets once MROS notifies him that the case has been forwarded to the prosecution authorities. Furthermore, the previously very short analysis period for the reports received has been extended to a maximum of 20 days, which will further improve the quality of the analyses.
The amendment also expands the range of predicate offenses. Serious offenses in the area of direct taxes are now also covered. Finally, for cash transactions above a threshold of CHF 100,000, the legislator also made traders subject to a reporting obligation to MROS.
Also related to the adapted FATF recommendations were the work carried out in the year under review within the framework of the National Risk Analysis (NRA) and the collection of statistical data. In particular, MROS carried out updating efforts with regard to the number of judgments issued and discontinuation orders issued in connection with money laundering reports. These figures are published in the Annual Report presents.
