Suspected money laundering cases hit record in Switzerland
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Last Updated: Tuesday, May 15, 2012, 00:03
  
New Delhi: Switzerland on Monday said its money laundering monitoring agency received a record number of 'suspicious activity reports', involving the highest ever amount of over USD 3.2 billion in 2011, but such requests from foreign countries fell last year.

While it did not disclose the name of countries whose Financial Intelligence Units (FIUs) have sent the requests, the Money Laundering Reporting Office of Switzerland (MROS) said that it has replied to most of these inquiries, within an average of five days following their receipt.

The issue of alleged black money stashed in banks in Switzerland and other foreign countries has been a topic of hot debate in India and various other countries.

In a 90-page report published on Monday, MROS has given various details concerning the types of its 'suspicious activity reports (SARs), and the numbers of clients and account holders named therein, as also the names of the top countries where such clients are based. However, India does not figure among the countries mentioned in the report.

MROS, part of Swiss Federal Office of Police, is Switzerland's central money laundering office and functions as a relay and filtration point between financial intermediaries and the law enforcement agencies.

As per the report, the MROS registered a significant increase in the number of incoming suspicious activity reports (SARs) in 2011, as it received a total of 1,625 SARs, an increase of 40 per cent over 2010.

"The total asset value involved also rose to a record sum of over CHF three billion (about Rs 3.2 billion or close to Rs 17,300 crore), more than the 2009 and 2010 reporting years together," MROS noted.

A majority of clients mentioned in these SARs were domiciled in Switzerland itself (40 per cent), followed by Caribbean (11 per cent), Central and South America (11 per cent), remaining Western Europe (7 per cent) Italy (6 per cent), Middle East (5 per cent), Africa (4 per cent), Great Britain (4 per cent) and Germany (2 per cent).

The others, including Asia, Eastern Europe, France and Australia, accounted for 10 per cent.

A majority of clients mentioned in these SARs were domiciled in Switzerland itself (40 per cent), followed by Caribbean (11 per cent), Central and South America (11 per cent), remaining Western Europe (7 per cent) Italy (6 per cent), Middle East (5 per cent), Africa (4 per cent), Great Britain (4 per cent) and Germany (2 per cent).

The others, including Asia, Eastern Europe, France and Australia, accounted for 10 per cent.

"Also, there was a fourfold increase in the number of SARs from the category of money transmitters, due mainly to the clean-up of accounts by one money transmitter and the subsequent reporting retroactively of numerous suspicious transactions," MROS said.

"A further reason for the increase in reporting volume is the application of more effective control mechanisms by financial intermediaries," the agency said.

About two-thirds of SARs came from the banking sector, while the second largest contributor of SARs was the payment services sector, with a share of more than 23 per cent.

The most number of SARs nearly one-third were submitted in connection with suspected fraud as the predicate offence. The number of SARs with suspected bribery, embezzlement or membership of a criminal organisation as predicate offence increased twofold.

Most cases involving suspected connections to a criminal organisation concerned the Italian Mafia. There was also a significant increase in SARs relating to suspected drugs offences.

However, the number of SARs relating to suspected terrorist financing fell from 13 in 2010 to 10 in 2011. The 10 cases involved assets totalling only about CHF 152,000, CHF 144,000 of which were related to one single case.

Among the SARs related to terror funding, countries like Pakistan, Afghanistan, Uzbekistan, Tunisia, England, Somalia, Albania, Kosovo, Italy, UAE and Switzerland were identified for nationality of the client and the beneficial owner.

About inquiries from abroad, MROS said that it replied to 564 inquiries from FIUs in 80 countries during 2011. This was slightly less than in 2010 (577 inquiries).

In contrast, there was an increase in the number of natural persons and legal entities mentioned in these inquiries from 1,937 in 201o to 2,123 in 2011.

There was a decrease in the number of foreign FIU inquiries that MROS had to turn down on formal grounds, from 77 to 48. Most of these inquiries either had no direct connection to Switzerland (so-called fishing expeditions), or concerned specific financial information that may only be provided by virtue of a mutual legal assistance request, MROS said.

"In 2011, MROS responded to FIU inquiries within an average of five working days following receipt. This was slower than in 2010 (four working days) but still lies well within the 30 days ... Of Best Practice Guidelines," it added.

PTI


First Published: Monday, May 14, 2012, 23:59


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