Swiss banks specialising in trade finance have not yet fully implemented the controls needed to ensure that they are not violating international sanctions according to the Financial Action Task Force (FATF).
The inter-governmental body combatting money laundering and terrorist financing also said the Swiss could do more to prevent financial crime and banks in particular should step up efforts to spot and report suspected crimes.
The Swiss Financial Market Supervisory Authority (FINMA) agrees with FATF, believing that banks specialising in trade finance lack the ability to adequately avoid transactions forbidden under sanctions.
These transactions require individual scrutiny before they are carried out but according to FATF, Swiss banks’ trade finance operations do not have sufficient resources to scrutinise each transaction.
Moreover, identifying dual-use assets requires specific in-house skills that they often do not have, according to a mutual evaluation report prepared by FATF and the Swiss authorities.
FINMA says in the report published this month that it is planning to carry out specific checks on banks’ systems for scrutinising trade finance transactions for sanctions violations.
The authority has introduced some checks, but says they must be more thoroughly implemented so that they are not merely a box-ticking exercise.
The FATF report, Anti-money laundering and counter-terrorist financing measures, Switzerland, Mutual Evaluation Report can be found here.
Categories: Trade Based Financial crimes News