PolyReg General Self-Regulatory Organisation

The Federal Assembly of the Swiss Confederation,
based on Articles 31^bis paragraph 2, 31^quater, 34 paragraph 2 and 64^bis of the Federal Constitution,

and having considered the Federal Council Dispatch dated 17 June 1996, decrees:

Chapter 1: General Provisions

Art. 1 Subject matter

This Act regulates the combating of money laundering as defined in Article 305^bis of the Swiss Criminal Code (SCC), the combating of terrorist financing as defined in Article 260^quinquies paragraph 1 SCC, and the due diligence required in financial transactions.

Art. 2 Scope of application

¹ This Act applies to financial intermediaries.

² Financial intermediaries are:

a.	banks as defined in the Banking Act of 8 November 1934;
b.	fund managers, provided they manage share accounts and they offer or distribute shares in collective capital investments;
b^bis.	investment companies with variable capital, limited partnerships for collective capital investments, investment companies with fixed capital and asset managers within the meaning of the Collective Investment Schemes Act of 23 June 20069, provided they offer or distribute shares in collective capital investments;
c.	insurance institutions as defined in the Insurance Supervision Act of 17 December 2004 that deal in direct life insurance or offer or distribute shares in collective capital investments;
d.	securities dealers as defined in the Stock Exchange Act of 24 March 1995;
e.	casinos as defined in the Gambling Act of 18 December 1998.

³ Financial intermediaries are also persons who on a professional basis accept or hold on deposit assets belonging to others or who assist in the investment or transfer of such assets; they include in particular persons who:

carry out credit transactions (in particular in relation to consumer loans or mortgages, factoring, commercial financing or financial leasing);
provide services related to payment transactions, in particular by carrying out electronic transfers on behalf of other persons, or who issue or manage means of payment such as credit cards and travellers' cheques;
trade for their own account or for the account of others in banknotes and coins, money market instruments, foreign exchange, precious metals, com- modities and securities (stocks and shares and value rights) as well as their derivatives;
…
manage assets;
make investments as investment advisers;
hold securities on deposit or manage securities.

⁴ This Act does not apply to:

the Swiss National Bank;
tax-exempt occupational pension institutions;
persons who provide their services solely to tax-exempt occupational pension institutions;
financial intermediaries within the meaning of paragraph 3 who provide their services solely to financial intermediaries within the meaning of paragraph 2 or to foreign financial intermediaries who are subject to equivalent supervision.

Chapter 2: Duties of Financial Intermediaries

Section 1: Duty of Due Diligence

Art. 3 Verification of the identity of the customer

¹ When establishing a business relationship, the financial intermediary must verify the identity of the customer on the basis of a document of evidentiary value. Where the customer is a legal entity, the financial intermediary must acknowledge the provisions regulating the power to bind the legal entity, and verify the identity of the persons who enter into the business relationship on behalf of the legal entity.

² In the case of cash transactions with a customer whose identity has not yet been identified, the duty to verify identity applies only if one transaction, or two or more transactions that appear to be connected, involve a considerable financial value.

³ Insurance institutions must verify the identity of the customer if the amount of a single premium, the regular premium or the total of the premiums involves a considerable financial value.

⁴ If in cases under paragraphs 2 or 3 there is any suspicion of money laundering or terrorist financing, the identity of the customer must be verified even if the relevant amounts have not been reached.

⁵ The Swiss Financial Market Supervisory Authority (FINMA), the Federal Gaming Board and the self-regulatory organisations shall determine what constitutes a considerable financial value within the meaning of paragraphs 2 and 3 in their respective fields and adjust such values as required.

Art. 4 Establishing the identity of the beneficial owner

¹ The financial intermediary must obtain a written declaration from the customer indicating who the beneficial owner is if:

the customer is not the beneficial owner or if there is any doubt about the matter;
the customer is a domiciliary company;
a cash transaction of considerable financial value in terms of Article 3 paragraph 2 is being carried out.

² In the case of collective accounts or collective deposits, the financial intermediary must require the customer to provide a complete list of the beneficial owners and to give notice of any change to the list without delay.

Art. 5 Repetition of the verification of the identity of the customer or the establishment of the identity of the beneficial owner

¹ If doubt arises in the course of the business relationship as to the identity of the customer or of the beneficial owner, the verification of identity or establishment of identity in terms of Articles 3 and 4 respectively must be repeated.

² In the case of an insurance policy that may be surrendered, the insurance institution must also re-establish the identity of the beneficial owner if, in the event of a claim or the surrender of the policy, the person entitled to benefit is not the same person identified at the time that the insurance contract was concluded.

Art. 6 Duty to clarify

¹The financial intermediary is required to identify the nature and purpose of the business relationship wanted by the customer. The extent of the information that must be obtained is determined by the risk represented by the customer. ²The financial intermediary must clarify the economic background and the purpose of a transaction or of a business relationship if:

it appears unusual, unless its legality is clear;
there are indications that assets are the proceeds of a felony or are subject to the power of disposal of a criminal organisation (Art. 260^ter No. 1 SCC) or serve the financing of terrorism (Art. 260^quinquies para. 1 SCC).

Art. 7 Obligation to draw up and retain documents

¹ The financial intermediary must keep records of transactions carried out and of clarifications required under this Act in such a manner that other specially qualified persons are able to make a reliable assessment of the transactions and business relationships and of compliance with the provisions of this Act.

² The financial intermediary must retain the records in such a manner as to be able to respond within a reasonable time to any requests made by the prosecution authorities for information or for the seizure of assets.

³ After the termination of the business relationship or after completion of the transaction, the financial intermediary must retain the records for a minimum of ten years.

Art. 7a Assets of low value

The financial intermediary may dispense with complying with the duties of due diligence (Art. 3—7) if the business relationship only involves assets of low value and there is no suspicion of money laundering or terrorist financing.

Art. 8 Organisational measures

Financial intermediaries must take the measures that are required to prevent money laundering and terrorist financing in their field of business. They must in particular ensure that their staff receive adequate training and that checks are carried out.

Section 2: Duties in the Event of a Suspicion of Money Laundering

Art. 9 Duty to report

¹ A financial intermediary must immediately file a report with the Money Laundering Reporting Office Switzerland (the Reporting Office) as defined in Article 23 if it:

knows or has reasonable grounds to suspect that assets involved in the business relationship:
1. are connected to an offence in terms of Article 260^ter Number 1 or 305^bis SCC,
2. are the proceeds of a felony,
3. are subject to the power of disposal of a criminal organisation, or
4. serve the financing of terrorism (Art. 260^quinquies para. 1 SCC);
terminates negotiations aimed at establishing a business relationship because of a reasonable suspicion as defined in letter a.

^1bisThe name of the financial intermediary must appear in any report in accordance with paragraph 1. The identity of the financial intermediary's staff who are in charge of the case may be made anonymous in the report, provided it is guaranteed that the Reporting Office and the competent prosecution authority are able to contact them without delay.

² Lawyers and notaries are not subject to the duty to report insofar as they are bound in their activities by professional secrecy in terms of Article 321 SCC.

Art. 10 Freezing of assets

¹ A financial intermediary must immediately freeze the assets entrusted to it that are connected with the report filed under Article 9.

² It must continue to freeze the assets until it receives an order from the competent prosecution authority, but at the most for five working days from the time at which the report is filed with the Reporting Office.

³ …

Art. 10a Prohibition of information

¹ For as long as assets are frozen by decision of the financial intermediary, that intermediary is prohibited from informing the persons affected or third parties of the report under Article 9.

² If the financial intermediary itself is unable to freeze the assets, it may inform the financial intermediary that is able to do so and which is subject to this Act.

³ It may also inform another financial intermediary subject to this Act that a report has been submitted under Article 9 provided this is required in order to comply with obligations under this Act and provided both financial intermediaries:

provide joint services for one customer in connection with the management of that customer's assets on the basis of a contractual agreement to cooperate; or
are part of the same corporate group.

⁴ The financial intermediary who has been informed on the basis of paragraph 2 or 3 is subject to the prohibition of information in paragraph 1.

Art. 11 Exclusion of criminal and civil liability

¹ Anyone who in good faith files a report under Article 9 of this Act or who freezes assets in accordance with Article 10 may not be prosecuted for a breach of official, profession or trade secrecy or be held liable for breach of contract.

² This exclusion of prosecution and liability also applies to financial intermediaries that file a report under Article 305^ter paragraph 2 SCC or to self-regulatory organisations that file a report under Article 27 paragraph 4.

Chapter 3: Supervision

Section 1: General provisions

Art. 12 Responsibility

The following bodies shall supervise compliance by financial intermediaries with the duties set out in Chapter 2:

for financial intermediaries under Article 2 paragraph 2 letters a—d, FINMA;
for financial intermediaries under Article 2 paragraph 2 letter e, the Federal Gaming Board;
for financial intermediaries under Article 2 paragraph 3:
1. the recognised self-regulatory organisations (Art. 24),
2. FINMA, where the financial intermediaries are not affiliated to a recognised self-regulatory organisation.

Art. 13 (…)

Art. 14 Licensing and affiliation requirement

¹ Financial intermediaries within the meaning of Article 2 paragraph 3 that are not affiliated to a recognised self-regulatory organisation must request a licence from FINMA to carry on their business.

² The licence shall be granted only if:

the financial intermediary is registered in the Commercial Register as a commercial undertaking or has been officially authorised to carry on business;
the financial intermediary guarantees compliance with its duties in accordance with this Act by means of its internal regulations and organisation; and
the financial intermediary itself, as well as the persons responsible for its administration and management, enjoy a good reputation and guarantee compliance with their duties in accordance with this Act.

³ Lawyers and notaries who act as financial intermediaries must affiliate to a self-regulatory organisation.

Art. 15 (…)

Section 2: Duty to Report of the Supervisory Authorities

Art. 16

¹ FINMA and the Federal Gaming Board shall immediately submit a report to the Reporting Office if they have reasonable grounds to suspect that:

a criminal offence under Article 260^ter No. 1, 305^bis or 305^ter SCC has been committed;
assets are the proceeds of a felony;
assets are subject to the power of disposal of a criminal organisation; or
assets serve the financing of terrorism (Art. 260^quinquies para. 1 SCC).

² This duty applies only if the financial intermediary or the self-regulatory organisation has not already submitted a report.

Section 3: Supervision of Financial Intermediaries under Article 2 paragraph 2

Art. 17

FINMA and the Federal Gaming Board shall specify the duties of due diligence defined in Chapter 2 for the financial intermediaries under their supervision according to Article 2 paragraph 2 and stipulate how these duties must be fulfilled, unless a self-regulatory organisation regulates these duties of due diligence and their fulfilment.

Section 3a: Supervision of Financial Intermediaries under Article 2 paragraph 3

Art. 18 Duties

¹ The control authority shall perform the following duties:

it recognises the self-regulatory organisations or withdraws such recognition;
it supervises the self-regulatory organisations and the financial intermediaries directly subordinated to it;
it approves the regulations issued by the self-regulatory organisations in accordance with Article 25 and any amendments thereto;
it ensures that the self-regulatory organisations enforce their regulations;
it specifies in detail the duties of due diligence in terms of Chapter 2 for the financial intermediaries directly subordinated to it and stipulates how these duties must be fulfilled;
it maintains a register of the financial intermediaries directly subordinated to it and of persons to whom it has refused authorisation to act as a financial intermediary.

² FINMA may carry out on-the-spot inspections. It may instruct an audit company in accordance with Article 19b to carry out such inspections.

³ In relation to self-regulatory organisations of lawyers and notaries, it must instruct an audit company in accordance with Article 19b to carry out the inspections. The auditor company shall be governed by the same duties of confidentiality as apply to lawyers and notaries.

Art. 18a Public directory

¹ FINMA shall maintain a directory of the financial intermediaries under Article 2 paragraph 3 that are affiliated to a self-regulatory organisation. This directory shall be publicly accessible online.

² FINMA shall make the data available via a query system.

Art. 19 ( … )

Art. 19a Audit

¹ Financial intermediaries directly subordinated to FINMA under Article 2 paragraph 3 must submit themselves periodically to an audit by a licensed audit company.

² The audit company shall examine compliance with the duties under this Act and draw up a report thereon for the attention of the financial intermediary audited and FINMA.

³ If it detects infringements of the provisions of supervisory law or any other irregularities, it shall mention this in its report.

⁴ FINMA may conduct the audit itself in place of the audit company.

Art. 19b Licensing of the audit companies

An audit company shall be licensed if:

it is licensed as an auditor under Article 5 or as an audit company under Article 6 of the Auditor Oversight Act of 16 December 2005; and
it demonstrates that it has the required specialist knowledge and the required experience to conduct an audit in terms of this Act.

Art. 20 Consequences of licence withdrawal

If FINMA withdraws the licence from a financial intermediary directly subordinated to it under Article 2 paragraph 3 on the basis of Article 37 of the Financial Market Supervision Act of 22 June 200751, this shall result in dissolution in the case of legal entities and collective and limited partnerships, and in deletion from the Commercial Register in the case of sole proprietorships.

Art. 21 and 22 ( … )

Section 4: Money Laundering Reporting Office

Art. 23

¹ The Federal Office of Police shall manage the Money Laundering Reporting Office Switzerland (the Reporting Office).

² The Reporting Office shall examine the reports received and take measures in accordance with the Federal Act of 7 October 1994 on the Central Offices of the Federal Criminal Police.

³ It shall maintain its own data processing system in relation to money laundering.

⁴ It must notify the responsible prosecution authority immediately if it has reasonable grounds to suspect that:

an offence as defined in Articles 260^ter Number 1, 305^bis or 305^ter SCC has been committed;
assets are the proceeds of a felony;
assets are subject to the power of disposal of a criminal organisation; or
assets serve the financing of terrorism (Art. 260^quinquies para. 1 SCC).

Section 5: Self-Regulatory Organisations

Art. 24 Recognition

¹ Organisations are recognised as self-regulatory organisations if they:

have regulations in accordance with Article 25;
supervise their affiliated financial intermediaries with regard to compliance with their duties in terms of Chapter 2; and
ensure that the persons and audit companies they instruct to carry out inspections:
1. possess the required specialist knowledge,
2. provide the required guarantees that inspections will be carried out properly, and
3. are independent of the management and administration of financial intermediaries being inspected.

¹ The self-regulatory organisations of the undertaking "SwissPost" in accordance with the Postal Services Act of 30 April 1997 and those of the licensed transport undertakings under the Public Transport Act of 20 March 2009 must be independent of their respective managements.

Art. 25 Regulations

¹ Self-regulatory organisations must issue regulations.

² The regulations shall specify the duties of diligence of their affiliated financial intermediaries within the meaning of Chapter 2 and stipulate how these duties must be fulfilled.

³ They shall further stipulate:

the requirements for the affiliation and exclusion of financial intermediaries;
how compliance with the duties in terms of Chapter 2 is monitored;
appropriate penalties.

Article 26 Lists

¹ The self-regulatory organisations must maintain lists of their affiliated financial intermediaries and of persons to whom they refuse affiliation.

² They must notify FINMA of these lists and of any amendments thereto.

Art. 27 Exchange of information and duty to notify

¹ The self-regulatory organisations and FINMA may mutually exchange any information or documents that they require in order to fulfil their duties.

² The self-regulatory organisations shall notify FINMA of:

terminations of memberships;
decisions on the refusal of affiliation;
decisions to exclude and the reasons therefor;
the opening of sanctions proceedings that may end in exclusion.

³ They shall provide FINMA with a report at least once each year on their activities in terms of this Act together with a list of decisions on sanctions issued during the period covered by the report.

⁴ They shall submit a report immediately to the Reporting Office if they have reasonable grounds to suspect that:

a criminal offence under Article 260^ter No. 1 or 305^bis of the Swiss Criminal Code has been committed;
assets are the proceeds of a felony;
assets are subject to the power of disposal of a criminal organisation; or
assets serve the financing of terrorism (Art. 260^quinquies para. 1 SCC).

¹ The duty under paragraph 4 does not apply if a report has already been filed by an financial intermediary affiliated to a self-regulatory organisation.

Art. 28 Withdrawal of recognition

¹ FINMA shall not withdraw recognition from a self-regulatory organisation under Article 37 of the Financial Market Supervision Act of 22 June 2007 without prior warning.

² If a self-regulatory organisation has its recognition withdrawn, its affiliated financial intermediaries shall become subject to the direct supervision of FINMA.

³ They shall be subject to the licensing requirement in Article 14, unless they affiliate to another self-regulatory organisation within two months.

⁴ Lawyers and notaries who act as financial intermediaries must affiliate within two months to another self-regulatory organisation if recognition has been withdrawn from the organisation to which they are affiliated.

Chapter 4: Administrative Assistance

Section 1: Cooperation among Domestic Authorities

Art. 29 Exchange of information among authorities

¹ FINMA, the Federal Gaming Board and the Reporting Office may provide each other with any information or documents required for the enforcement of this Act.

² …

³ The Reporting Office shall inform FINMA and the Federal Gaming Board of the decisions of the cantonal prosecution authorities.

Art. 29a Prosecution authorities

¹ The prosecution authorities shall notify the Reporting Office without delay of any pending proceedings connected with Articles 260^ter Number. 1, 260^quinquies paragraph 1, 305^bis and 305^ter paragraph 1 SCC. They shall provide the Reporting Office without delay with judgements and decisions on the closure of proceedings, including the grounds therefor.

² They shall also notify the Reporting Office without delay of rulings that they have issued on the basis of a report from the Reporting Office.

³ They may provide FINMA and the Federal Gaming Board with any information and documents that they require in order to fulfil their duties, provided that this is not prejudicial to the criminal proceedings.

⁴ FINMA and the Federal Gaming Board shall coordinate any intervention in relation to a financial intermediary with the competent prosecution authorities. They shall consult with the competent prosecution authorities before passing on any information or documents received.

Section 3: Cooperation with Foreign Authorities

Art. 30 and 31 ( … )

Article 32 …

¹ The cooperation of the Reporting Office with foreign prosecution authorities is governed by Article 13 paragraph 2 of the Federal Act of 7 October 1994 on the Central Offices of the Federal Criminal Police.

² The Reporting Office may also pass on personal data to equivalent foreign authorities if this is provided for in an act or international treaty or if:

the information is required exclusively to combat money laundering or terrorist financing (Art. 260quinquies para. 1 SCC);
it is required to justify a Swiss request for information;
it is in the interests of the person concerned and that person has consented or his consent may be presumed in the circumstances.

³ The name of the reporting financial intermediary or the name(s) of its staff may not be passed on by the Reporting Office to foreign prosecution authorities in terms of paragraph 1 or foreign authorities in terms of paragraph 2.

Chapter 5: Processing of Personal Data

Article 33 Principle

The processing of personal data is governed by the Federal Act of 19 June 1992 on Data Protection.

Art. 34 Data collections in connection with the duty to report

¹ Financial intermediaries must maintain separate data collections containing all the documents connected with the report filed.

² Data from these data collections may be passed on only to FINMA, the Federal Gaming Board, self-regulatory organisations, the Reporting Office and the prosecution authorities.

³ The right to information of persons affected in accordance with Article 8 of the Federal Act of 19 June 1992 on Data Protection shall be suspended for as long as assets are frozen in accordance with Article 10 paragraphs 1 and 2.

⁴ The data must be destroyed five years after the report is filed.

Art. 35 Processing by the Reporting Office

¹ The processing of personal data by the Reporting Office is governed by the Federal Act of 7 October 1994 on the Central Offices of the Federal Criminal Police. The right of private individuals to information is governed by Article 8 of the Federal Act of 13 June 2008 on Federal Police Information Systems.

² The exchange of information between the Reporting Office and FINMA, the Federal Gaming Board and the prosecution authorities may be carried out by means of a computerised access procedure (online).

Art. 35a Verification

¹ In order to fulfil its duties, the Reporting Office may by means of a computerised access procedure verify whether a person reported or notified to it is listed in any of the following databases:

the National Police Index;
the Central Migration Information System;
the automated Register of Convictions;
the State Security Information System;
the person, file and case management system used in the field of mutual assistance in criminal matters.

² The right of access for further information is governed by the provisions applicable to the information system concerned.

Chapter 6: Criminal Provisions and Procedure

Article 36 ( … )

Article 37 Violation of the duty of disclosure

¹ Anyone who fails to comply with the duty to report in terms of Article 9 shall be liable to a fine of up to 500,000 francs.

² If the offender acts through negligence, he or she shall be liable to a fine of up to 150,000 francs.

³ In the event of a repetition of the offence within five years of the conviction taking full legal effect, the fine shall be a minimum of 10,000 francs.

Art. 38—40

Chapter 7: Final Provisions

Art. 41 Implementation

¹ The Federal Council shall issue the provisions required for the implementation of this Act.

² It may authorise FINMA and the Federal Gaming Board to issue implementing provisions on matters of limited importance and in particular on matters of a primarily technical nature.

Article 42 Transitional provisions

¹ This Act applies from the date on which it comes into force to financial intermediaries within the meaning of Article 2 paragraph 2. The duty to report in terms of Article 9 applies from this date to all financial intermediaries.

² Within one year of this Act coming into force, self-regulatory organisations must apply to the AML Control Authority for recognition and submit the regulations they issue within the framework of self-regulation for approval.

³ Two years after this Act comes into force, financial intermediaries within the meaning of Article 2 paragraph 3 that are not affiliated to a recognised self-regulatory organisation shall become subject to direct supervision by the AML Control Authority and must apply for a licence in accordance with Article 14.

⁴ Within two years of this Act coming into force, lawyers and notaries acting as financial intermediaries must affiliate to a self-regulatory organisation.

Art. 43

Concerns the French text only

Art. 44 Referendum and entry into force

¹ This Act is subject to an optional referendum.

² The Federal Council determines the date on which this Act comes into force.

The Act enters into force the 1st of April 1998.

CC 955.0

Federal Act on Combating Money Laundering and Terrorist Financing in the Financial Sector (Anti-Money Laundering Act - AMLA)