With increasing regulatory requirements and trends toward greater transparency, understanding the Source of Funds (SoF) and the Source of Wealth (SoW) of the Beneficial Owner (BO) has become a cornerstone in the Customer Due Diligence (CDD) process, particularly for legal entities. Collecting such information during the on-boarding process is part of the CDD sets of controls which seek to address greater money laundering, financial crime and terrorist financing risks.
Author: Ekaterina Rues
Historically, the CDD finds its roots in Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) regulations driven by the 40 Recommendations of the Financial Action Task Force (FATF). In modern financial services in Switzerland, the Customer Due Diligence (CDD) is a core component of an effective Anti-Money Laundering and Financial Crime Risk Management frameworks.
Under Swiss law, money laundering, pursuant to art. 305bis of the Swiss Criminal Code (SCC), is a criminal offense that is punished with a prison sentence of more then three years. According to SCC, any person who carries out an act that is aimed at frustrating the identification of the origin, the tracing or […]
Main elements of the international best practices and standards in the context of Swiss Banking System Compliance and Risk Management
Switzerland assumes its responsibility for maintaining and supervising its own financial system in the context where there are many international initiatives that have helped to standardize its banking system activities. These international best practices and standards have been important for Switzerland because of the growing interdependence of the financial markets […]
Regulatory changes resulting from the Credit Crunch 2007-2009 : the case of Great Britain and Switzerland
Certainly, the Credit Crunch had a profound global devastating impact on many countries when they started to experience long and deep recessions. The austerity measures imposed by the European Union and the national governments put many economies under a stress test. For example, in the United Kingdom, the legislative and […]
Historically, legislation has always been the responsibility of national governments, resulting in a wide variety of regulatory frameworks around the world. In recent years, the increasing dependence on global markets rather than local markets has increased international initiatives to achieve a more consistent approach to compliance with the rules. Despite […]
Modern global financial services are inherently risky undergoing high regulatory pressure because their corporate culture must be embedded in well- functioning risk-based frameworks. The emphasis is put on risk assessments when the employees of the first line of defense are to explain clearly to local regulators what their risks are, […]