Switzerland: Suspicions Of Money Laundering: Extension Of The Duty To Report Beyond The End Of The Business Relationship

Last Updated: 15 September 2016
Article by Andrew M. Garbarski

Most Read Contributor in Switzerland, August 2019

In a recently released milestone decision (6B_503/2015 dated 24 May 2016), the Swiss Federal Supreme Court ("SFSC") held, for the very first time, that the duty of financial intermediaries to report suspicions of money laundering to MROS may extend beyond the end of the relevant business relationship. The purpose of this briefing is to summarize the SFSC's reasoning, identify some of the key questions raised by this latest case law and anticipate its potential practical impact for financial intermediaries in carrying out their compliance related duties.


Financial intermediaries subject to the Anti-Money Laundering Act ("AMLA"), such as banks, insurance companies, securities dealers, external asset managers, fiduciaries, trustees etc. are bound by a wide range of duties set forth therein and in its related ordinances. Among other things, such financial intermediaries have a specific, enhanced duty to clarify the background and purpose of a transaction or the business relationship in certain situations, notably if there are indicia that the assets could stem from a crime or a qualified tax offence.

If, based on founded suspicions, a financial intermediary knows or assumes that the assets involved in the business relationship result from such a crime or qualified tax offence, he has the duty according to Art. 9 AMLA to immediately file a suspicious activity report with the Money Laundering Reporting Office Switzerland ("MROS"). In practice, most of the time suspicions become founded after the enhanced duty to clarify is completed.

The breach of the duty to timely report to MROS may give rise to criminal penalties (Art. 37 AMLA). Indeed, the law foresees a fine of up to CHF 500,000 for an intentional breach, respectively up to CHF 150,000 for negligence. Criminal liability is incurred in the first place by the individuals that acted, or failed to act, on behalf of the financial intermediary (employees, management, etc.). The fine may be imposed on the entity itself instead of the individual offenders only under certain requirements and provided that it does not exceed CHF 50,000. The offence set out in Art. 37 AMLA is prosecuted by the Federal Department of Finance and may come into play irrespective of the existence and outcome of a criminal investigation for money laundering.

The SFSC's reasoning

One of the issues examined by the SFSC in its decision of 24 May 2016 was the starting point of the seven-year limitation period applicable to the prosecution of the offence set forth in Art. 37 AMLA. In a nutshell, the appellant, a professional fiduciary (Treuhänder; fiduciaire), argued that the duty to report founded suspicions to MROS expired upon the termination of the business relationship – the triggering event in terms of the limitation period in case of a breach. According to the appellant, the offence was time-barred, since the first instance judgment had been rendered more than seven years after the termination of the business relationship.

Whilst acknowledging that the above issue is disputed in the legal literature, the SFSC upheld the approach followed by the previous instances (and further supported by certain scholars) and concluded that the duty to report founded suspicions to MROS may indeed survive a business relationship, as long as there exist assets that can be potentially forfeited. The SFSC mentioned that it would be appalling if a financial intermediary could avoid its duty to report founded suspicions to MROS by terminating a business relationship.

In the case submitted to the SFSC, the consequence thereof was twofold: (i) the financial intermediary's duty to report to MROS remained applicable until the suspicious funds were frozen by the prosecution authorities, and (ii) the criminal offence set forth Art. 37 AMLA was not yet time-barred at the time of the first instance judgment.

Key questions raised

The rather brief legal developments of the SFSC and the somewhat peremptory conclusion in connection with the duration of the duty to report make the overall situation uncertain. This latest case law raises several questions, such as the following (without limitation)1:

  • Is the decision's scope limited to cases where the financial intermediary had founded suspicions before the termination of the business relationship?
  • Or does it also apply to situations in which such suspicions appear afterwards (e.g. based on negative news spread in the media)?
  • Which steps (if any) is the financial intermediary expected to undertake, in such a scenario, in view of clarifying the rationale or background of the suspicious transactions or of the overall (meanwhile terminated) relationship?
  • How can a financial intermediary reasonably be able to tell, after the termination of the business relationship, if there are still assets (no longer under his control) that could be potentially forfeited?
  • If a financial intermediary refrains from reporting founded suspicions to MROS after the end of the business relationship, may this be interpreted as an implicit admission that a report should have occurred earlier and thus that Art. 9 AMLA was breached?
  • On the other hand, if founded suspicions are indeed reported to MROS after the end of the business relationship, will this not have the effect of bringing the matter to the authorities' attention and thus increase the risk of prosecution for breach of Art. 9 AMLA (late reporting)?
  • Etc.

Potential practical impact

The practical impact of the decision 6B_503/2015 remains, to a large extent, unclear. Pending further guidance from the Courts, we recommend adopting a cautious approach, notably in cases where the founded suspicions appear after the end of the business relationship.

In these situations, in view of minimizing the potential exposure under Art. 37 AMLA and depending on the particular circumstances of each case, it might be advisable for the financial intermediary to consider reporting such suspicions to MROS, a minima pursuant to Art. 305ter para. 2 of the Swiss Criminal Code, which deals with the "right to file" mere suspicions of money laundering.


1 For a detailed analysis, see Alain Macaluso/Andrew M. Garbarski, Communication de soupçons de blanchiment après la fin de la relation d'affaires (to be published in Aktuelle Juristische Praxis/Pratique Juridique Actuelle, 10/2016).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions