The criminal law of 1990 and 1994

Articles 305bis and 305ter of the Criminal Code

The Federal Council adopted its dispatch on the amendment of the Criminal Code on 12 June 1989. Parliament dealt with the bill within a year. The National Council decided on 28 November 1989, departing in some respects from the Federal Council's draft. The Council of States approved the bill on 19 March 1990, and both chambers adopted it in the final votes of 23 March 1990.¹ No referendum was requested, and the new provisions entered into force on 1 August 1990.

Article 305bis of the Criminal Code created the offence of money laundering. It punishes any person who carries out an act that is aimed at frustrating the identification of the origin, the tracing or the confiscation of assets which that person knows or must assume originate from a felony. The basic offence carries a custodial sentence of up to three years or a monetary penalty. Aggravated cases, in particular where the offender acts as a member of a criminal organisation or a gang formed for money laundering, or makes a large turnover or substantial profit through commercial laundering, are punishable more severely.² The provision sits in the chapter on offences against the administration of justice. Its protected interest is the functioning of criminal justice, specifically the state's ability to confiscate the proceeds of crime. That choice of placement explains why the Swiss offence has always been tied to a predicate felony and why, for most of its history, ordinary tax evasion did not qualify.

Article 305ter, adopted at the same time, created an offence that was specifically Swiss. It punishes any person who, in the course of business, accepts, holds on deposit, or helps to invest or transfer third-party assets and who fails to verify the identity of the beneficial owner with the diligence that the circumstances require. The penalty was imprisonment for up to one year, a fine, or both.³ In effect, the legislature took the core rule of the 1977 banking agreement and made it a criminal norm for the whole financial sector. What had been a contractual duty for signatory banks became a statutory duty for anyone who handled third-party assets professionally. The Kopp affair had shown that the dangerous actors were often outside the banks, and Article 305ter was designed to reach them.

The end of Form B

The new criminal provision had an immediate effect on the banking agreement. The Federal Banking Commission concluded that the Form B exemption for lawyers and other professionals bound by secrecy was incompatible with the legal obligation in Article 305ter. It issued a circular letter dated 25 April 1991, and as from 1 July 1991 banks were no longer permitted to accept Form B.⁴ For Zurich lawyers, many of whom had held client accounts for decades under Form B, this was a substantial change. From then on they had to disclose their clients to the bank unless the account served a narrowly defined professional purpose, such as the holding of court deposits or advances on fees.⁵ In the same year the Banking Commission issued guidelines on the prevention of money laundering that applied to all banks under its supervision.⁶

The second package of 1994

The criminal provisions of 1990 left two gaps that practitioners quickly noticed. The first was the absence of an offence for participating in a criminal organisation, which made it difficult to prosecute the structures behind drug trafficking and laundering. The second concerned the position of bankers who discovered suspicious transactions. If a banker informed the authorities, he risked violating banking secrecy under Article 47 of the Banking Act. If he remained silent, he risked becoming complicit. The legislature answered both problems in a second package that entered into force on 1 August 1994. It introduced the offence of participation in or support of a criminal organisation in Article 260ter of the Criminal Code, strengthened the provisions on confiscation and gave financial intermediaries an express right to report suspicions in Article 305ter paragraph 2.⁷

The right to report was a characteristically cautious compromise. It permitted financial intermediaries to inform the criminal authorities of indications that assets originated from a crime, without breaching banking secrecy. It did not oblige them to do so. The 1996 dispatch observed that most member states of the Financial Action Task Force had already introduced a reporting obligation, with Canada, Switzerland and Turkey among the exceptions.⁸ The distinction between a right and a duty to report would occupy the next stage of legislation.

The international frame: the Financial Action Task Force

Switzerland's legislation of 1990 did not arise in isolation. At their summit in Paris in July 1989, the heads of state and government of the G7 established the Financial Action Task Force to examine and develop measures against money laundering. The original membership consisted of the G7 countries, the European Commission and eight further countries, among them Switzerland.⁹ In 1990 the Task Force published its Forty Recommendations, a comprehensive plan of action that became the global benchmark for anti-money-laundering law.¹⁰

The FATF introduced a mechanism that Switzerland had not known before: peer review. Member states examined each other's laws and practices in mutual evaluations. The first evaluations were carried out from 1991, and by 1993, according to the FATF's own account, nearly all member states had made the laundering of drug proceeds a crime.¹¹ For Switzerland, which had adopted its offence before the Forty Recommendations were published, the early rounds were comparatively comfortable. The weaknesses that evaluators identified lay elsewhere, in the absence of a reporting duty and in the lack of supervision over financial intermediaries outside the banking sector. The Anti-Money Laundering Act of 1997 was Switzerland's answer to both points.

Notes

1. Parliamentary Services, 89.043 Geldwäscherei (above), which records the dispatch of 12 June 1989 (BBl 1989 II 1061) and the parliamentary dates. The referendum deadline expired on 2 July 1990. ↩
2. Swiss Criminal Code, Article 305bis, German and English text with footnotes, https://www.droit-bilingue.ch/de-en/3/31/311.0-305bis-372.html. The footnote to the provision records that it was inserted by No. I of the Federal Act of 23 March 1990, in force since 1 August 1990 (AS 1990 1077; BBl 1989 II 1061). ↩
3. The International Lawyer, vol. 26, no. 2 (1992), at 548, on Articles 305bis and 305ter in force since 1 August 1990 and on the penalty under Article 305ter. ↩
4. The International Lawyer, vol. 26, no. 2 (1992), at 551. ↩
5. The International Lawyer, vol. 26, no. 2 (1992), at 551, on the prohibition of Form B for new accounts from 1 July 1991 and the four exceptions for lawyers and notaries: trust accounts for advances on fees, deposits in the settlement of estates, deposits in separation or divorce proceedings and escrow accounts for assets in dispute in pending litigation, https://scholar.smu.edu/cgi/viewcontent.cgi?article=2893&context=til. ↩
6. Federal Banking Commission, press release of 9 July 2002 on the new Money Laundering Ordinance, referring to “EBK-Rundschreiben 91/3 Richtlinien zur Bekämpfung der Geldwäscherei vom 18. Dezember 1991” and its total revision as EBK-RS 98/1 of 26 March 1998, https://www.finma.ch/finmaarchiv/ebk/d/archiv/2002/pdf/neu090702-02d.pdf. ↩
7. Federal Council, Botschaft zum Geldwäschereigesetz of 17 June 1996 (above); PricewaterhouseCoopers AG, Bekämpfung der Geldwäscherei und der Terrorismusfinanzierung in der Schweiz, 4th ed. (2016), https://www.pwc.ch/de/publications/2016/pwc_buch_geldw%C3%A4schereigesetz_2016.pdf. ↩
8. Federal Council, Botschaft zum Geldwäschereigesetz (above). ↩
9. FATF, FATF 30 years (1989–2019), https://www.fatf-gafi.org/content/dam/fatf-gafi/annual-reports/FATF30-(1989-2019).pdf.coredownload.pdf, listing Australia, Austria, Belgium, Luxembourg, the Netherlands, Spain, Sweden and Switzerland alongside the G7 participants and the European Commission. The FATF’s country page gives 1990 as the year of Swiss membership. ↩
10. FATF, “History of the FATF”, https://www.fatf-gafi.org/en/the-fatf/history-of-the-fatf.html. ↩
11. FATF, FATF 30 years (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 September 2025.