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Sharp increase in reported cases of money laundering

The authorities say attempting to launder money in Switzerland is becoming riskier.


Two years after the introduction of a new law on money laundering in Switzerland, the Swiss authorities say bank officials are increasingly reporting suspicious financial transactions.

In its annual report, the office responsible for investigating money laundering says the number of reported cases is up by over 200 per cent.

Over the last year, the money laundering reporting office, which is part of the Swiss justice and police ministry, received 370 cases of suspicious financial transactions, involving over SFr1.5 billion. This compares with 160 cases the year before, and only 30 or 40 before the introduction of the new legislation.

"This is good news," said Daniel Telesklaf, head of the reporting office. "It doesn't mean more money laundering is taking place, it means bank officials are working with the new legislation to report suspicious cases."

Many of the new cases involved funds thought to belong to the late Nigerian leader Sani Abacha; over SFr800 million have been frozen in connection with the Abacha case. Meanwhile there was also a significant increase in the number of reported cases with a Russian connection, many of them related to the investigation into alleged Russian money laundering through the Bank of New York.

"Nigeria and Russia do not account completely for the increase," said Telesklaf. "The fact is, Swiss banks are much more aware and much more ready to report than they used to be."

In the non-banking financial sector, including fund managers and insurance companies, there is less co-operation. "Here we would really like to see an improvement," said Telesklaf. "One problem is, not everyone in the non-banking sector is completely clear what money-laundering is, so we are trying to work with them, and train them, in the hope of getting more reliable reports."

But Telesklaf's office has a staff of only four, with a mandate to investigate and refer all reported cases within four working days. Recently there have been reports in the Swiss media claiming the office cannot cope with all the new cases, and rumours that Telesklaf and his colleagues have threatened to resign.

In response, the justice and police ministry has announced a reorganisation of all the various departments, which deal with money laundering, and it is thought Telesklaf may be given more staff.

"I can't comment on that," said Telesklaf, "I'll just say I'm waiting happily for the changes to take place, and I have no plans to resign." The next step in judging the success of the new money laundering legislation will be to see how many convictions are secured from the reporting of suspicious cases.

So far, no one has been convicted, but there are over 60 court actions pending. "We'll have to wait a bit longer for that," said Telesklaf, "but if in a year or two we still have no convictions, I'll be disappointed."

In the meantime, Telesklaf does not like to hazard a guess on how much money laundering is still taking place in Switzerland. "That would not be a serious exercise", he said, "we can only say that the reported cases are part of the iceberg - whether they are just the tip or not remains to be seen."

by Imogen Foulkes


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