Will reports soon be forwarded to the police ?

(Translated by DeepL)

The discretion surrounding the publication of the 2024 Annual Report, coupled with the removal of reports prior to 2015 from the MROS website (available on the Swiss National Library website), raises questions at a time when the practical guidelines published by MROS are regularly cited in ongoing proceedings. On the other hand, the typologies are now the subject of an interesting report, which also highlights good practices by financial intermediaries (FIs).

In addition to its intelligence-gathering task (processing reports), the MROS is increasingly emphasising the pillars of (international) cooperation and prevention (see the Swiss FIPPP, the Crypto Symposium and the Chinese Underground Round Table) in its mission.

The statistics, which show a 27.5 % increase in the number of reports, do not call for any particular comment.

The MROS takes a position on issues that are important to FIs. Here are a few thoughts from a practical perspective, rather than a strict legal analysis.

In line with its 2023 Annual Report, the MROS reiterates the need to receive ‘high-quality’ reports : ‘The degree of clarification must not be sacrificed on the altar of immediacy.’

The MROS’s position is clear and welcome, but it does not resolve the tension felt by FIs between the seemingly misaligned views of the competent authorities (in addition to the MROS : FINMA, the FDF, and even the cantonal and federal public prosecutors) on the concept of immediacy of communications. For further discussion and forward-looking analysis, see Polli, cdbf.ch/1352.

‘Interpretation of Art. 11a AMLA – Justification of requests for information’.Art. 11a AMLA allows the MROS to request information from a FI following a communication from another FI or a request from a foreign counterpart. The MROS excludes any possibility of providing additional information such as the identity of the person who made the request, the alleged offence or the potential link between the client of the requested FI and the facts under suspicion. It invokes data protection standards and the professional secrecy to which the MROS is subject, as well as the prohibition on tipping off applicable to FIs. However, these requests constitute an indication of money laundering according to the Annex to the FINMA AEOI Regulation (section 3.4) : upon receipt of a request pursuant to Art. 11a AMLA, a FI shall carry out clarifications (Art. 6 para. 2 let. b AMLA). According to case law, it should extend its investigations to other accounts linked to the persons identified following the MROS request (including closed accounts, if applicable) and extend the transaction period under consideration. It is unable to conduct its clarifications effectively, however, given the lack of information provided by the MROS. Even if its clarifications do not reveal any clear suspicion, the discomfort created by the situation will often lead the FI to report the elements not covered by its response to the MROS request – rather than filing a no-AML report – for fear of being accused of a failure to report under Art. 37 AMLA. These will rarely be ‘qualitative’ reports. In addition, for the FI, a reported business relationship requires special follow-up as part of the risk-based approach. This issue deserves to be re-examined in depth in order to find a more efficient solution for all stakeholders.

Definition of ‘criminal prosecution authorities’. Referring to Art. 12 CCP (which came into force in 2011), MROS announces that the circle of authorities to which it can report cases under Art. 23 AMLA extends beyond the cantonal public prosecutors’ offices and the OAG. It reserves the right to forward reports to administrative criminal authorities and the police. While it is conceivable that a report could be forwarded to the FDFA (customs), for example, the prospect of forwarding a report to a cantonal police force or the federal police – which is attached to the same office as the MROS – is perplexing. The purpose of communications has evolved, with the confiscatory aspect (see AMLA 1996) diminishing in favour of ‘active intelligence’ (see Annual Report 2023, p. 9). However, the purpose of forwarding information to a criminal prosecution authority is also to prompt a decision on the possible freezing of assets (Art. 10 para. 1 cum para. 3 AMLA). Such a decision cannot be taken by the police. The AMLA 1996 did not define the criminal authorities, but referred to cantonal rules, mentioning the power of seizure (which referred to public prosecutors and/or investigating judges depending on the judicial organisation of each canton). This is because the magistrate’s decision on freezing originally came after the five-day period during which the FIU had to freeze the assets (Art. 10 para. 2 aAMLA until 31 December 2015). In addition, the AMLA 2007 Message on Art. 29a AMLA (Criminal authorities) lists the federal criminal prosecution authorities as the OAG and the Office of the Federal Investigating Magistrates. Finally, what is the point of duplicating the list of authorities to which communications are forwarded if the police cannot decide on their own to freeze assets and must request the public prosecutor’s office to do so ? It seems doubtful that the 1997 legislature envisaged forwarding communications to the police. Relying on the CCP, which came into force after the AMLA and fundamentally changed the criminal prosecution regime, is not convincing, especially since the decision-making process relating to the freezing of assets has also evolved in the meantime. If the aim is to find a solution to the excessive workload of the authorities (e.g. simplified processing of money mule cases), the issue should be examined in detail to assess whether the entire communication process can be improved, for example by introducing a risk-based approach, while taking into account the obligations of all parties involved.