The Swiss Financial Market Supervisory Authority (FINMA) has announced that it fined private financial institution Bank Audi for violating money laundering regulations. As per the information detailed in the press release, FINMA’s decision to fine Bank Audi is due to breaches in obligations in preventing money laundering and violations of financial market law.

Throughout the proceedings, the bank cooperated with FINMA and took the necessary measures to restore compliance with the regulatory requirements. Additionally, FINMA mentioned that the institution has to disgorge profits totalling nearly USD 4.3 million and a capital surcharge of USD 21 million. FINMA’s fine basis As part of an on-site inspection in 2021, FINMA evaluated client relationships with politically exposed persons from multiple countries.

Throughout this process, the regulatory body discovered limitations in the prevention of money laundering, with FINMA prompting to open enforcement proceedings in 2022, which, at the time of the announcement, were concluded. In the case of Bank Audi, FINMA obtained all internal audit reports and, within a specific one, the bank’s internal auditors mentioned shortcomings in the prevention of money laundering about certain relationships and demanded to be taken measures. Yet, the report was initially not mentioned to FINMA and was not submitted to it. Furthermore, in addition to this breach of the duty to deliver information, FINMA discovered that the bank inadequately clarified the origin of assets in high-risk client relationships.

The press release mentions that the bank failed to clarify the purpose of some transactions, while also not reporting them to the Money Laundering Reporting Office. Bank Audi cooperated with FINMA in enforcing the proceedings, with it taking all required measures to correct its issues. The bank replaced individuals in several positions and increased the amount of resources allocated to compliance.

Also, the bank conducted investigations of certain client relationships and submitted MROS reports. Bank Audi dissolved relationships with various clients, however, it decided to continue some of the high-risk ones. Additional measures taken by FINMA FINMA also imposed further measures on Bank Audi, ordering the disgorgement of illegally generated profits totalling USD 4.3 million.

Also, due to the continuing client relationships with a high-risk profile, the regulatory body required a surcharge of nearly USD 21 million on the minimum capital. FINMA’s measures cover additional adjustments to the Anti-Money Laundering (AML) defence mechanisms, with the bank not being allowed to enter any new relationships with politically exposed persons or high-risk corporate clients for two years or until all requirements are implemented and fulfilled. The regulatory body is set also to appoint an audit mandatory to monitor the implementation of the measures.

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