While the core content of the previous Code of Conduct for Banks remains unchanged, the implications of the changes could be material for the financial intermediaries concerned, for instance:
Cash transactions: for cash transactions of CHF 15,000 or more, the contracting party and beneficial owner must be identified and established if the bank has no business relationship with this party. The financial intermediaries concerned must train their employees and amend the relevant processes and controls (e.g. forms, transaction monitoring, compliance controls).
Duty to document: banks’ internal rules and regulations have to reflect the shortened period for providing documents and other information about the contracting party, beneficial owner and/or controlling party at the opening of business relationships. Furthermore, the onboarding processes have to be amended with stricter controls around adherence to the deadline, the blocking for incoming and outgoing transactions as well as the termination of the business relationships.
CDB 20 will allow the financial intermediary to make a risk-based assessment at the time when the documentation obligation is being fulfilled, thus giving it greater leeway. For a financial intermediary to be able to make use of such an exception or deviation in the form of its own risk assessment, the relevant procedures and processes must be reflected in the internal rules and regulations.
Video and online identification: By including the FINMA Circular on video and online identification in the CDB 20, identification by video is treated in the same way as a face-to-face identification, and online identification is equated to onboarding by way of correspondence.
Transitional provisions: CDB 20 will become applicable to all new business relationships entered into after 1 January 2020 or to those for which the due diligence procedures have to be repeated after 1 January 2020. For already existing business relationships, the previous documentation is considered sufficient.