The Money Laundering Reporting Office of Switzerland or MROS received significantly more suspicious activity reports (SARs) in 2014 than in the previous reporting year. With a total of 1,753 SARs, this represents an increase of 24% over 2013. The total asset value of these reports remained high, at more than SFr 3 billion (€2.9 billion).

In 2014, more than 85% of total reporting volume came from the banking sector, whose contribution rose from 1,123 SARs in 2013 to 1,495 SARs in 2014 ‒ an increase of 33%. Meanwhile, the number of SARs from other financial sectors declined, most notably from fiduciaries and asset managers.

A rise in total asset value

The total asset value of reporting volume increased by 12% to more than SFr 3.3 billion (€3.186 billion). One SAR involved assets of more than SFr 200 million (€193.1 million), while six other SARs involved assets of more than SFr 75 million (€72.4 million). Together, these seven SARs made up approximately one-third of total asset value. The amount of assets involved in SARs forwarded to the prosecution authorities stayed the same as the previous year at SFr 2.8 million - less than a thousandth of the total asset value of reports.

Predicate offences: twofold increase in cases of suspected bribery

The number of SARs involving bribery as a suspected predicate offence more than doubled. This was due, in particular, to one large and complex case that inspired financial institutions to send off 50 SARs. This case went to the prosecuting authorities for further investigation.

As in previous years, fraud was again the most frequently reported predicate offence to money laundering, with the number of SARs relating to this offence increasing over the previous reporting year (448 SARs as opposed to 373 in 2013). Moreover, the number of reports involving phishing, i.e. the fraudulent misuse of a computer, remained high.

The number of SARs involving terrorist financing fell, from 33 in 2013 to 9 in 2014. However, the 33 SARs in 2013 related to only 8 cases in all, while all 9 SARs in 2014 related to separate cases. The situation therefore has not changed substantially.

More analysis being done at the MROS

The MROS forwarded 72% of all SARs to the prosecution authorities. This is 7% lower than in the previous reporting period and continues the falling trend of the last three years. The decline can be explained by the fact that MROS filters out more SARs that are unsubstantial, leading to an easing of the burden on public prosecutors’ offices. Under the partial revision of the Anti-Money Laundering Act, which came into force at the end of 2013, MROS has been granted additional powers to gather information from third party financial intermediaries. Moreover, MROS strengthened the co-operation with its foreign counterparts and public prosecutors. All these factors have contributed to the decrease.

New laws for new recommendations

On 12 December 2014, the Swiss parliament passed the Federal Act on Implementing the Revised Recommendations of the Financial Action Task Force, which is expected to come into force on 1 January 2016. The new piece of legislation will have a direct effect on the MROS because the reporting system will undergo momentous changes. Assets will no longer be automatically frozen on submission of a SAR to MROS, but rather when MROS informs the financial intermediary that the case has been forwarded to the prosecuting authorities. Furthermore, the very short deadline for analysing SARs has been extended to a maximum of 20 days, which should further improve the quality of the analyses. In the United Kingdom it has long been 31 days.

The revised legislation also extends the spectrum of predicate offences, which will include for the first time serious offences related to direct taxation. It also includes the obligation on merchants to submit a SAR to the MROS whenever they receive more than SFr 100,000 (€96,550) in cash for any given transaction.

Also in connection with the revised FATF recommendations was the work that Switzerland started on a National Risk Assessment (NRA) and the collection of statistical data. The MROS began updating its information on the outcomes of criminal investigations and proceedings in money laundering cases and presented the figures in the 2014 Annual Report.