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 Popular Article in Switzerland, September 2016

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”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.