As mentioned last spring, on 2 March 2020 a majority of the members of the centre-right parties in the National Council voted against revising the Anti-Money Laundering Act (AMLA). On 10 September 2020, the Council of States voted in favour and thus the measure went back to the National Council for a second vote on 15 December 2020.
Amendments by the Council of States
In addressing the Act on Combating Money Laundering and the Financing of Terrorism, the Council of States dropped the tightening of rules that the Federal Council had foreseen for attorneys, among others. Under the corresponding provision, the application of the AMLA would have been expanded to attorneys so that future commercial (advisory) services would be provided in connection with the ‘founding, management or administration’ of domiciliary companies and trusts, even if there was no disposal over foreign assets. This provision was clearly rejected by a vote of 30 to 11, with just one abstention.
The Council of States made other amendments:
- It decided against reducing the threshold at which due diligence obligations apply to traders of precious metals and gems from a cash payment of CHF 100,000 to CHF 15,000. It did so even though the new threshold would have applied only to wholesalers and not to retail dealers.
- It also clarified the meaning of ‘justified suspicion’ in the law:
‘Justified suspicion exists if the financial intermediary has specific evidence that the assets involved in the business relationship may entail an offence pursuant to Art. 9, para. 1(a) and that such evidence is deemed to be credible or is confirmed following further investigations.’
During the debate in the Council of States, there was criticism of the definition of justified suspicion. Following the votes in the Federal Council and the upper chamber, the wording is to be corrected.
The National Council’s Legal Affairs Committee
On 9 October 2020, the Legal Affairs Committee debated the revision of the Act on Combating Money Laundering and Terrorism Financing a second time. It took up the proposal during its meeting. The Committee echoed the Council of States and removed the provisions on advisory services from the draft. It also decided on a more restrictive interpretation of the term ‘justified suspicion’ and ruled against reducing the cash threshold for precious metals and precious gems dealers to CHF 15,000.
However, in the final vote the Committee rejected the draft. It argued that the changes would have diluted the draft to such an extent that the increased monitoring by the Financial Action Task Force (FATF) would have been effectively limitless.
Decision by the National Council
On 15 December 2020, the National Council debated the AMLA revision for a second time. Despite the Committee’s opinion, the National Council voted 138 to 50, with one abstention, to adopt the proposal. A rejection would have meant the end of the revision.
The proposal was subsequently sent back to the Committee. This gave the Committee another three months until the spring session to have an in-depth look at the options regarding the expanded applicability of the AMLA to attorneys.
Outlook
The votes in the national assemblies made it clear that there is no readily applicable solution regarding an expansion to include attorneys. Will the Legal Affairs Committee now vote in favour of the draft prepared by the Committee itself on 9 October 2020, or will it revise the draft so it can pass with a majority vote? Things remain suspenseful in the new year and it is still difficult to predict how the Legal Affairs Committee and ultimately the National Council will vote.