FATF reviews AML progress in US and Switzerland

Both the US and Switzerland have taken major strides forward in their anti-money laundering and counter-terrorist financing (AML/CFT) regimes in recent years, but also have scope for further improvement, according to the Financial Action Task Force (FATF).
 
The inter-governmental body recently conducted evaluations of AML/CFT measures in both countries, concluding that they are "robust" overall.
 
In the US, there is a particularly high risk of money laundering and terrorist financing, owing to factors such as the global dominance of the US dollar, the high number of daily transactions processed by the nation's banks and the openness of its financial system.
 
The FATF found that the country has a "significant level of understanding" of these risks and has largely succeeded in keeping terrorist funds out of its economy by enforcing targeted financial sanctions.
 
However, the report also concluded that risk mitigation through the US regulatory framework could be improved, with some "significant gaps" including minimal coverage of investment advisers, lawyers, accountants and real estate agents.
 
In Switzerland, there have been a number of improvements to the AML/CFT regime since the last assessment in 2005. One of the key reasons for this is what the FATF called a "clear political will" to protect the integrity of the country's financial centre.
 
It added: "On the operational side, law enforcement authorities have demonstrated the effectiveness of their investigative methods and of the mutual legal assistance they provide in the context of international money laundering cases.
 
"A number of these investigations related to grand corruption cases and led to the repatriation of considerable amounts to affected countries."
 
In terms of areas where Switzerland could improve its AML/CFT practices, the FATF encouraged authorities to strengthen controls relating to the reporting of suspicious transactions, particularly for financial institutions.
 
It also stressed that sanctions for non-compliance should be consistent with the severity of the misconduct, prompting organisations to review their policies where necessary.

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