Switzerland AML Requirements for Financial Institutions: A Practical Guide

AML Guide · August 2026 · AML

Switzerland occupies a distinctive position in the global anti-money laundering landscape.

The Regulatory Framework

The Anti-Money Laundering Act (AMLA), known in German as the Geldwaeschereigesetz (GwG) is the primary legislation governing anti-money laundering in Switzerland. It has been most recently revised to strengthen beneficial ownership requirements and to align with evolving international standards.

The FINMA Anti-Money Laundering Ordinance sets out the specific supervisory requirements and expectations that FINMA applies to regulated institutions. FINMA, the Swiss Financial Market Supervisory Authority, is the primary regulator for financial institutions and holds responsibility for licensing, supervision, and enforcement.

FATF 40 Recommendations inform Swiss law. Switzerland is a member of the FATF and undergoes regular mutual evaluation reviews. The FATF Recommendations are international standards, not Swiss domestic law. Where this article refers to FATF requirements, it identifies the international standard that has shaped Swiss domestic rules; where it refers to the AMLA or FINMA ordinances, it identifies the binding Swiss legal obligations.

Supervisory Structure: FINMA and the SRO Regime

Swiss AML supervision operates through two complementary channels.

Direct prudential supervision by FINMA for institutions classified as significant, including major banks, large insurance companies, and systemically important financial institutions.

Supervision by Recognised Self-Regulatory Organisations (SROs) , including the Swiss Bankers Association (SBA) and other FINMA-recognised SROs. Institutions that belong to an SRO are generally supervised by that SRO rather than directly by FINMA, though FINMA retains overarching supervisory authority.

This structure means that the specific rules and guidance issued by your SRO are directly relevant to your obligations. SRO rules vary in detail. Institutions should ensure they are familiar with the specific guidance applicable to their sector and SRO membership.

Who Is Regulated

Entity Type	Key Obligations
Banks and securities dealers (FINMA-licensed)	Full AMLA obligations; CDD, screening, monitoring
Insurance companies (life and investment-linked products)	Premium payments, benefit payments, policy cancellations
Asset managers and fund managers	Investor screening, beneficial ownership
Trust companies and TCSPs	Trust services, company formation, corporate secretarial
Payment service providers	Under revised Payment Services Act
Fintech companies	If activities fall within AMLA scope

Customer Due Diligence Under Swiss Law

The AMLA requires CDD measures to all business relationships, with intensity determined by assessed risk.

Standard CDD is the baseline: identify and verify the customer and beneficial owner, understand the purpose and intended nature of the relationship, conduct ongoing monitoring.

Simplified CDD may be applied where assessed risk is low. The FINMA Anti-Money Laundering Ordinance specifies categories where simplified measures may be appropriate. Simplified CDD does not mean the absence of CDD.

Enhanced due diligence applies where assessed risk is elevated. Common triggers: PEP relationships, high-risk jurisdictions, complex ownership structures, unusual transactions.

Beneficial Ownership Identification

The AMLA defines the beneficial owner as any natural person who ultimately owns or controls the customer, or on whose behalf a transaction is conducted or a business relationship is established.

For legal entities, this generally means any person who holds more than 25% of shares or voting rights, or who exercises effective control through other means. For trusts, the beneficial owner includes settlors, trustees, beneficiaries with a material interest, and any other natural person who exercises effective control.

Swiss law does not require regulated entities to independently investigate every possible layer of ownership where reasonable reliance can be placed on customer-provided information. However, reasonable steps must be taken, and where information appears inconsistent or incomplete, further inquiry is required.

PEP Screening and Enhanced Due Diligence

Swiss law adopts the FATF definition of politically exposed persons. A PEP is a natural person who is or has been entrusted with a prominent public function, including heads of state, senior politicians, senior government officials, judicial or military officials, senior executives of state-owned enterprises, and important political party officials.

The definition extends to immediate family members and close associates.

When a customer or beneficial owner is identified as a PEP, enhanced due diligence applies. Additional measures must be taken to understand source of wealth and source of funds. Screening for PEP status is not a one-time event at onboarding. It is an ongoing obligation.

MemberCheck provides automated screening against PEP databases, sanctions lists, and adverse media, supporting the initial and ongoing screening obligations that Swiss law requires.

Enhanced Due Diligence for High-Risk Relationships

Beyond PEP relationships, the AMLA requires enhanced due diligence in any situation where assessed risk is elevated.

High-risk jurisdictions are those identified by FATF as having strategic deficiencies. FATF publishes two lists: High-Risk Jurisdictions subject to a Call for Action and Jurisdictions under Increased Monitoring. Switzerland has its own rules about the treatment of transactions and relationships associated with these jurisdictions.

Complex structures require enhanced due diligence to understand the purpose and nature of the structure and identify the natural persons behind it. The AMLA specifically addresses shell companies and similar arrangements.

The approval of high-risk relationships typically involves senior compliance oversight, often at the level of the MLRO or a senior compliance committee.

Ongoing Monitoring Obligations

The AMLA requires ongoing monitoring throughout the life of the relationship. This covers both periodic review of the customer risk profile and continuous monitoring of transactions.

Periodic reviews should be conducted at intervals determined by assessed risk. High-risk relationships require more frequent reviews. Lower-risk relationships may have longer intervals.

Transaction monitoring is the continuous, systematic review of activity within customer accounts and across the institution. The purpose is to identify transactions that are inconsistent with the customer’s known profile, have no apparent economic or lawful purpose, or match any of the identified red flags.

FraudShield provides transaction monitoring capabilities that support the detection of unusual activity patterns. Effective monitoring requires both sound detection logic and efficient workflow management for alert investigation.

Suspicious Transaction Reporting to MROS

Where a regulated entity identifies activity that it suspects may be related to money laundering or terrorism financing, it is required to report to the Money Laundering Reporting Office Switzerland (MROS) . The reporting obligation applies when there is a reasonable suspicion, not only when certainty exists.

Tipping off is prohibited. A regulated entity that makes a report to MROS must not inform the customer or any third party that a report has been made or that an investigation is underway.

The practical implication is that the reporting process must be clearly defined, staff must be trained to recognise indicators that trigger a report, and the process for escalating and filing an STR must be sufficiently documented.

Record-Keeping Requirements

Swiss law requires records to be retained for a minimum of ten years from the date of termination of the business relationship or the date of the transaction. This ten-year retention period is significantly longer than in many other jurisdictions.

Records must be retrievable within a reasonable timeframe if required by FINMA, the relevant SRO, or law enforcement. Electronic storage is permissible provided the system meets requirements for data integrity, security, and accessibility.

FINMA Examination Expectations and Common Findings

FINMA examines governance and risk culture, policies and procedures, the quality of implementation in customer-facing processes, the effectiveness of transaction monitoring, the management of alerts and suspicious activity reports, and the quality of record-keeping.

Common findings historically include: gaps in beneficial ownership verification (particularly for complex corporate structures), inadequate documentation of risk assessments and CDD decision rationale, insufficient evidence of periodic reviews at the required frequency, and transaction monitoring systems that generate excessive alerts without adequate resourcing for investigation.

These findings are not merely administrative concerns. FINMA has taken enforcement action against institutions where AML compliance failures have been identified as systemic or serious.

Conclusion

Swiss AML compliance is governed by a distinctive framework that combines statutory obligations under the AMLA and the FINMA Anti-Money Laundering Ordinance with a supervisory structure that relies significantly on SROs. Switzerland is not an EU member state, and EU AML directives are not directly applicable.

The obligations are substantial. Customer due diligence, beneficial ownership verification, PEP screening, enhanced due diligence for high-risk relationships, ongoing transaction monitoring, reporting to MROS, and ten-year record-keeping are all legal requirements.

Regulated entities remain responsible for assessing their own risk profile, designing and implementing appropriate controls, and demonstrating the effectiveness of those controls to their regulator. The support that compliance technology provides is meaningful, but it is a means of executing the obligations, not a substitute for them.