Anti-money-laundering legislation is becoming more severe and becoming more important in the Swiss private banking industry. Recently, the Swiss Financial Market Supervisory Authority (www.finma.ch) imposed sophisticated IT-based programs to detect suspicious transactions. Every day, the compliance officer receives a list with unusual transactions on his desk for further investigation. All transactions he does not understand in reasonable time are blocked until he is in a position to understand the economic background of a transaction.

 

*** Breaking News***

Kazakh president’s clan is in the sights of the Swiss justice system

December 2011 - www.choicesforkazakhstan.com

Click here to read the article!

 

*** PRESS RELEASE *** PRESS RELEASE ***

 

If the funds are coming in the name of an offshore company from exotic locations, the compliance officer will freeze your bank account even if your transaction has nothing to do with money laundering. The pressure exercised by the United States of America and the European Union on the Swiss bank secrecy is tremendous. The Swiss bankers have to pay for the preservation of the Swiss bank secrecy. In exchange to be authorized to maintain the bank secrecy they are forced to implement the strongest anti-money-laundering legislation in the world. This includes monitoring of all transactions using constant transactional scrutiny and supervision of all relationships and transactions with Politically Exposed Persons, so called PEP’s. Well published events and financial scandals involving politicians, high ranking governmental officials and former dictators like Sese Seko Mobutu, former president of Kongo, Ferdinand Marcos, former president of the Philippines, Vladimiro Montesinos, Sani Abacha, Augusto Pinochet had a tremendous negative impact on the Swiss private banking industry causing severe reputational damage. The banks are worried about the negative reputation that they acquired in the last decades. They have learned to put their reputation before their clients. They simply do not care if they are damaging a particular client. Young and inexperienced bankers are stopping important and legitimate transactions. Due to the tremendous increase of new accounts opened for Russian clients, Swiss banks have recently hired many Russian individuals solely based on their language skills and without financial industry experience. The training and support that bankers receive is extremely limited. In addition, the individual banker takes on 100% of the risk for every transaction. In a case of a problematic transaction, a banker may be fined and jailed. Therefore, these new bankers are stressed, overstretched, afraid and insecure because they are not prepared to perform their duties. They are often responsible for having stopped and affected legitimate business and for having blocked the accounts. The premature misinterpretation of the economic background of certain transactions - erroneously qualified as suspicious activities – can cause millions of dollars of damage. In such a situation immediate intervention from a competent partner is imperative. If you do nothing, your account will remain frozen – maybe for years.

Also read the recent newspaper article: Kazakh president's clan is in the sights of the Swiss justice system

If your funds are frozen, contact us immediately asking for immediate support and intervention. Due to our deep knowledge and experience in the private banking industry, after a brief investigation with the compliance officer, we will know why your account is locked. We support our clients in collecting the right documents to unlock the bank account as fast as possible. We advise our clients on which documents must be submitted to the bank and which documents must be retained. The delivery of wrong documentation can be contra productive making your case more complicated than it was. We know what the compliance officer wants to hear and see. In most of the cases we know the compliance officer of your Swiss bank on a personal level which makes things much easier. It is of crucial importance to solve the questions at the compliance level before the issue is reported to the Money Laundering Reporting Office Switzerland (MROS). According to a recent press release dated the 28 of April 2011 the Swiss Federal Office of Police (www.fedpol.admin.ch) announced an increase of filed suspicious activity reports of more than 29% compared to the previous annual reporting period. (www.fedpol.admin.ch/content/fedpol/en/home/dokumentation/medieninformationen/2011/2011-04-28.html).

FINMA is the regulator for Swiss banks (www.finma.ch). FINMA punished Swiss banks for having hesitated or for having consumed too much time before reporting suspicious activities to the MROS. That’s one of the reasons why Swiss bankers are becoming more nervous if they have to handle suspicious transactions. According to the old anti-money laundering law the bank was punished by a private claim asking for the compensation of damage suffered due to unjustified account seizure initiated by his client in case of unjustified reporting to MROS and unjustified account seizure. Now, the law changed. The right of the client to sue the bank for compensation of damages in case of unjustified reporting was cancelled by law in order to encourage the bank to file suspicious activity reports to the MROS. That means that the bank has nothing to fear from his client in case of unjustified reporting to the MROS. That means that in case of doubt the bank has no reason to hesitate to report. This is the reason why it is so important to act immediately and solve the problem directly with the relationship manager of the bank before he involves the compliance officer. The right timing is crucial.

It is imperative to act immediately in order to avoid the reporting from the relationship manager to the compliance officer, or, the bank to the MROS. If your transaction is reported, you risk waiting for years until your account will be unlocked. Usually, the accounts are unlocked after the termination of the criminal procedure. This can take years, even in Switzerland.

 

It is clever to ask the prosecutor to segregate your case from a more complicated and bigger case. If one time involved in a big investigation with hundreds of frozen accounts, it is difficult to come out in a reasonable time period. Each case if different and has to be considered carefully.

 

In most of the cases we can act immediately and negotiate a reasonable solution in occasion of a face to face meeting with the relationship manager, the compliance officer or with the prosecutor. We know how to negotiate for you and we fight for your rights. We go for you - immediately!

Our client from St. Petersburg had a couple of accounts with reputable Swiss banks in the name of his offshore companies. A Swiss trustee (in German: Treuhänder) managed his offshore companies and many other offshore companies belonging to other clients. In a transaction of our client from St. Petersburg the trustee used the bank account of a third offshore company belonging to one of the trustee’s clients in order to avoid disclosure of the name of our client’s offshore company in connection with a flow-trough transaction. Unfortunately, this account was under investigation in a big criminal case with hundreds of accounts blocked. Our client had nothing to do with the beneficial owner of the other offshore company. The prosecutor in Geneva blocked hundreds of accounts just to make sure to block as many funds as possible. Therefore, he blocked also the account of our client’s offshore company. We checked the entire account documentation with the bank. We were looking for sufficient documents allowing us to convince the prosecutor about the legal purpose of the flow-trough transaction. We found the transaction report in the bank. The explanation on the transaction’s background was very poor and not sufficient to convince the prosecutor to activate the account again. Together with the client we collected a statement issued by the final beneficiary of the payment confirming the economic background of the payment. We translated the content of the statement and we presented it to the prosecutor as attachment to a letter we wrote demanding to activate the account again. We explained to the prosecutor that our client had nothing to do with the people investigated. Shortly after, the account was activated again by the prosecutor.

Our client had acquired an Italian passport and executed an important transaction to his trustee for the delivery of the passport. Our client travelled the world with this passport and he was never stopped at the borders. The passport was a real Italian passport and not faked. He opened an accounts with the Italian passport for 65 millions of Euros distributed in seven offshore companies. He showed his passport to the Italian embassy asking if the passport is faked or not. The Italian embassy confirmed that the passport was genuine. Our client used his passport as asset protection instrument because he was afraid that the Russian FSB can take his business and his money away by inventing a criminal act, asking for international legal assistance to Switzerland and claiming back the funds to Russia. Based on his new passport he could hide and protect his fortune from the takeover by the FSB. Unfortunately, his trustee had offered the passport not exclusively to him but distributed to many other clients. One of the trustee’s clients and Italian passport holders was involved in a money laundering case. During the investigation a list came up with names of all new Italian passport holders. All accounts opened in the names appearing on the list were blocked. During the investigation we learned that the Italian passports sold by the trustee are special passports issued in a special program for the protection of witness in a criminal trial against organized crime in Italy in compliance with specific anti-mafia legislation enacted in Italy. According to Italian law a witness has the right to claim for a new identity with a new name, new address and a new birth certificate. Normally, it takes years and years before such blocked funds are coming in the hands of the account holders again. In a meeting with the prosecutor we wanted to find a more rapid solution for our client and we came finally to a deal: the prosecutor will activate the accounts under the condition that our client will testify against his trustee. It was the firm intention of the prosecutor to collect sufficient evidence to bring the trustee in prison. We convinced our client to come to Switzerland and testify before the judge. A few weeks later the prosecutor separated our case form the rest of the case by giving a new number to the procedure. From a formal legal point of view it was a separate case now. The prosecutor activated the accounts of our client after we demonstrated by edition of around 40 kg on documentary evidence in hard copies that the funds were legally earned and of non criminal source. In co-operation with the prosecutor we negotiated a small fine to be paid by our client for having misused the wrong passports for account opening. By segregation of the case from the big investigation it was easy for the prosecutor to close our case separately, if provided with a different number. We gained years due to the formal segregation of procedures and our client is happy again to have unrestricted access to his Swiss accounts again.

 

Our founding partner, Enzo Caputo, has a post graduate education in compliance management and he was a compliance officer in big banks for decades. He knows which arguments are appropriate and which not to make your account unfrozen.
If your bank account is blocked - do not hesitate to call us. We will fight for you. In this sector we are convinced to be more successful than any other law firm. Our multilingual staff is prepared to receive clients from anywhere in the world. We go for you!

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Legal & Tax Services

Talstrasse 20
Am Paradeplatz
8001 Zurich
Switzerland

P: +41 44 212 44 04
F: +41 44 212 44 05
enzo.caputo(at)swiss-banking-law.com

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