FINMA makes no concessions to virtual currencies in latest AML rules

The Swiss Financial Market Supervisory Authority (FINMA) today published the fully revised Anti-Money Laundering Ordinance (AMLO-FINMA), with the new document taking into account the increased digitalization of payments but making no concessions to virtual currencies.

The revised version of the Ordinance bears the impact of opinions gathered from industry representatives during a public consultation on the new rules opened in February this year. Overall, the regulator said the response to the new rules was positive, with the comments mainly concerning the threshold for spot transactions in Switzerland, the definition of “controller”, details required for payment orders and provisions for new payment methods and virtual currencies.

The latter appeared to be a hot topic when designing the new AML rules, with the provisions for new payment methods amended and now reflect the increasing digitalisation of payment transactions. Under the new rules, cashless payments of goods and services amounting to CHF 5,000 ($5,382) a month and/or CHF 25,000 a year to traders in Switzerland can be made without formal client identification.

The watchdog stresses, however, that: As regards virtual currencies, FINMA did not make any concessions owing to heightened money laundering risks.

This could be a bit disappointing to Bitcoin fans, as Switzerland has so far been rather welcoming to virtual currencies. Let’s recall that one year ago that FINMA authorized SBEX (Swiss Bitcoin Exchange).

The new FINMA Anti-Money Laundering Ordinance will come into effect on January 1, 2016. The revision of this ordinance reflects the revised Anti-Money Laundering Act, as well as the Financial Action Task Force (FATF) recommendations.

Amid the changes is an obligation for financial intermediaries to consistently determine the natural persons behind operationally active legal entities and partnerships for which the concept of “controller” has been put in place. In addition, AMLO-FINMA now sets out the prerequisites which allow relaxation of due diligence requirements for payment service providers offering cashless payment transactions and for institutions under the Collective Investment Schemes Act (fund management companies, investment companies and asset managers).

There also changes in statutory reporting requirements: for example, despite reports to the Money Laundering Report Office (MROS), client instructions may be executed by financial intermediaries (assets are not frozen immediately).

To view the official press release by FINMA, click here.

To download the full AMLO-FINMA, click here.

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