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COVID-19: Specific exemption under AML regulation

  • Nicolas Moser, Partner |

FINMA Guidance 03/2020 – Application for financial institutions

In its FINMA Guidance 03/2020, FINMA implements additional facilitations regarding anti-money laundering regulations that should help financial institutions cope with the crisis when opening new account relationships.

COVID-19 continues to have far-reaching consequences for the economy. In this context and in addition to the measures taken by the Swiss Confederation, the National Bank and in its own communication (FINMA Guidance 02/2020), FINMA on 7 April 2020 has published further clarifications on exemptions related to its supervisory practice in the context of Covid-19. It stipulates exemptions regarding the identification requirement under anti-money laundering regulation. Indeed, FINMA points out that although video and online identification is an option, many financial intermediaries have not yet used it and it is not always possible to implement such a process in the short term.

FINMA has therefore granted relief in the application of due diligence obligations for new accounts until 1 July 2020. It extends the period from 30 days (initially prescribed by Article 45 CDB 20) to 90 days for confirming the authenticity of copies of identity documents. If necessary, FINMA may extend or adapt this relief. This provision can be applied to new business relationships so that they can be opened with a simple copy of an identity card (providing the authentication in the subsequent 90 days).

This alleviation is justified by the fact that the COVID-19 pandemic is generally considered as a situation which, within the meaning of Art. 45 CDB 20, requires a bank account to be used, on an exceptional basis, in order not to disrupt the normal course of business. However, for business relationships with increased risks, it must still be assessed and documented on a case-by-case basis whether applying the exception in that particular case is acceptable in view of the associated money-laundering risks. Regardless of the relationship’s risk category, the missing confirmation of authenticity must be provided within 90 days.

This facilitation may also be available for non-banks, such as external asset managers that are regulated through a self-regulatory organization (SRO) as soon as their SRO also provides for this facilitation.

This should help financial institutions cope with the crisis when opening new account relationships.

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