Switzerland Announces Increase In Reported Financial Crime

by Ulrika Lomas, Tax-News.com, Brussels

06 April 2009

The number of suspicious activity reports (SARs) filed in Switzerland in connection with money laundering rose again in the 2008 reporting period. Total SARs during 2008 amounted to 851, up 7% from 795 in 2007. The increase was due mainly to the greater volume of reports from the banking sector, which reached a new record high, informed a Swiss government release, adding that the total value of assets involved doubled to reach an all-time high of CHF1.87bn (USD1.64bn).

In 2008, the Money Laundering Reporting Office Switzerland (MROS) received a total of 851 SARs. Although the increase of 7% (+56 SARs) was noticeably less than the increase of 28% (+176 SARs) in 2007, the trend in reporting practices remained similar: with a total share of 67%, the large majority of SARs came once again from the banking sector. As in the previous year, most SARs (38.5%) were related to fraud, particularly investment fraud. Third on the list of predicate offences was bribery (9.5%) related to individual cases of corruption which, due to their complexity involving numerous business connections, generated several SARs. Although the acts of corruption took place abroad, the suspected bribe money was deposited in Switzerland.

The record high in the value of assets amounting to CHF 1.87 billion is attributed to three SARs totalling CHF700m. Two of these cases involved fraud, and one involved corruption. The remaining asset volume remained on a par with the previous year, added the government’s release.

MROS received nine SARs in 2008 relating to suspected terrorist financing and involving total assets of more than CHF1m. The largest share of asset value was related to a single SAR involving CHF942,000. The case was forwarded to the appropriate prosecuting authority, which subsequently dismissed the case. None of the incoming SARs relating to terrorist financing was based on the State Secretariat for Economic Affair's (SECO) so-called Taliban Regulations. All but one SAR with an unclear economic background were based on information received from third parties (press reports, information from third persons or prosecuting authorities) indicating possible terrorist involvement. After careful scrutiny, MROS forwarded seven of the nine SARs to the Office of the Attorney General of Switzerland, which has in the meantime dismissed or suspended three of the cases. Four cases are pending.

The proportion of SARs forwarded to the prosecuting authorities - and thus their quality - remained high and even rose slightly to 81% over the previous reporting year (2007: 79%). The proportion of forwarded SARs varied according to the sector which had submitted the reports: whereas it totalled 87% of SARs from the banking sector, it amounted to 60% for the payment services sector. The payment services sector is characterised by the high number of SARs from so-called money transmitters whose nature of business yields limited information on their walk-in customers, which is ultimately reflected in the quality of SARs from this sector.

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