Swiss Non-Banking Sector Comes Under Scrutiny Over Money Laundering

by Ulrika Lomas, Tax-News.com, Brussels

20 November 2001

Although Switzerland has been praised for its recent efforts to combat money laundering in the country's legendary banking sector, the task of enforcing regulation in the non-banking sector is proving to be an uphill struggle for the new Money Laundering Control Authority head, Dina Balleyguier.

According to the Swiss Money Laundering Reporting Office's latest annual report, of the 311 reports of suspicious transactions, only 75 came from the country's 7,000 non-bank financial intermediaries. Of those 75, very few have resulted in prosecution, according to Swiss officials.

When she first took the poisoned chalice as new head of the MLCA in October, Ms Balleyguier predicted that the non-banking financial sector which includes securities firms, investment advisers, currency exchangers, credit card companies, insurers and casinos would rigorously oppose greater supervision and reporting. These new figures appear to have confirmed her fears. However, speaking after the release of the report, the rookie MLCA chief appeared to be taking a philosophical approach:

'It's not a bad law, but you can't expect a new law to work in one year,' she mused. 'People who have never been supervised before need to learn what supervision is.'

In addition to dealing with the passive resistance of the non-banking sector and staffing shortages at the Money Laundering Control Authority, Dina Balleyguier also faces the challenge of deciding if any other sectors should be brought, doubtless unwillingly, under the umbrella of greater supervision and reporting.

'There are about 10...open-ended questions,' she explained recently. 'One is whether commodities traders must have a license with us; another is whether asset traders with one-man offshore companies should be included. Another is whether someone doing asset management for their family should be included. It's very complicated.'

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