The FATF evaluation and the reform of 2025–2026

The mutual evaluation of December 2016

The Financial Action Task Force evaluates its members in rounds of mutual evaluations that assess both technical compliance with the forty FATF Recommendations and the effectiveness of the national system in eleven "immediate outcomes". Switzerland's fourth-round report was adopted at the FATF plenary in October 2016 and published on 7 December 2016. The FATF concluded that the Swiss regime was technically sound and had achieved good results, but that it would benefit from improvements in order to be fully effective.¹ It asked the Swiss authorities to strengthen their control of the duty to report suspicious transactions, in particular by financial institutions, and called for sanctions for breaches of the anti-money laundering requirements that are commensurate with the seriousness of the misconduct. In technical compliance it rated Recommendation 10 on customer due diligence, which includes the identification of beneficial owners, and Recommendation 40 on international cooperation only partially compliant. The Swiss follow-up showed that the transparency of legal persons and the absence of due diligence duties for advisers who create and administer companies and trusts were further points of criticism.²

Switzerland was placed in enhanced follow-up and reported regularly on its progress. The revision of the AMLA adopted on 19 March 2021, in force since 1 January 2023, answered several points. It defined reasonable suspicion, separated the report from the freeze, introduced the periodic updating of client data and the verification of beneficial ownership information, and extended the AMLA to certain associations at risk of terrorist financing.³ In its fourth follow-up report of 19 October 2023 the FATF rerated Recommendation 10 on customer due diligence and Recommendation 40 on international cooperation from partially compliant to largely compliant. Switzerland's technical compliance thus stood at 8 recommendations rated compliant, 29 largely compliant and 3 partially compliant, and the country moved to regular follow-up.⁴ The Federal Department of Finance stated that Switzerland had largely remedied the shortcomings in six of the nine recommendations criticized in 2016 and that further work was needed on the transparency of legal entities and on advisory services, in particular in the structuring of companies and trusts.⁵

In effectiveness, the FATF's published ratings give Switzerland a high level for risk understanding and national coordination (Immediate Outcome 1). They show a substantial level for the use of financial intelligence, money laundering investigations and prosecutions, confiscation and the outcomes on terrorist financing and proliferation (Immediate Outcomes 6 to 11) and a moderate level for international cooperation, supervision, preventive measures and the transparency of legal persons and arrangements (Immediate Outcomes 2 to 5).⁶ The moderate ratings for supervision, preventive measures and legal persons are the background to the reform of 2025. The next mutual evaluation of Switzerland in the FATF's fifth round is scheduled for 2027– 2028, and the Federal Council timed the entry into force of the reform so that the FATF can assess the effectiveness of the new measures.⁷

Notes

1. FATF, "Switzerland's progress in strengthening measures to tackle money laundering and terrorist financing", 19 October 2023, https://fatf-gafi.org/en/publications/Mutualevaluations/switzerland-fur-2023.html (with reference to the mutual evaluation of December 2016). ↩
2. FATF, "Mutual Evaluation Report of Switzerland", publication page of 7 December 2016 (adopted at the plenary of October 2016), https://www.fatf-gafi.org/en/publications/Mutualevaluations/Mer-switzerland-2016.html (reporting obligation, sanctions, R.10 partially compliant); FATF, follow-up report of 19 October 2023 (above) (R.10 and R.40 re-rated from partially compliant to largely compliant; move to regular monitoring); Federal Department of Finance, "FATF recognises Switzerland's progress", 19 October 2023, https://www.efd.admin.ch/efd/en/home/the-fdf/nsb-news_list.msg-id-98285.html (transparency of legal entities and advisory services). ↩
3. Arts. 6, 7, 9 and 9b AMLA as amended by the Federal Act of 19 March 2021 (above). ↩
4. FATF, follow-up report of 19 October 2023 (above). ↩
5. Federal Department of Finance, "FATF recognises Switzerland's progress", press release, 19 October 2023, https://www.efd.admin.ch/efd/en/home/the-fdf/nsb-news_list.msg-id-98285.html. ↩
6. FATF, "Switzerland", country page, https://www.fatf-gafi.org/en/countries/detail/Switzerland.html. ↩
7. Federal Department of Finance, press release of 19 October 2023 (above); Federal Office of Justice, media release of 12 June 2026 (above). ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of August 2025.