Swiss Financial Market Supervisory Authority FINMA appoints audit agent at MBaer Merchant Bank AG after US FinCEN designates it a primary money laundering concern

The Swiss Financial Market Supervisory Authority FINMA published an update on MBaer Merchant Bank AG following a US Financial Crimes Enforcement Network (FinCEN) announcement that it considers the bank a financial institution of primary money laundering concern. With FINMA’s own enforcement ruling against the bank not yet legally binding due to a pending appeal, FINMA has appointed an audit agent as a monitor at the bank and is in contact with both MBaer and FinCEN. FINMA had concluded enforcement proceedings against MBaer Merchant Bank AG three weeks earlier, including on anti-money laundering rules and risk management in the area of sanctions, but the bank’s appeal is pending before the Swiss Federal Administrative Court. The court has ordered accompanying measures for the duration of the proceedings, which FINMA says prevented it from implementing its own measures. FinCEN is proposing measures under Section 311 of the USA PATRIOT Act that would prohibit US banks from opening or maintaining correspondent accounts for MBaer Merchant Bank AG or on its behalf. FinCEN’s proposed Section 311 measure is undergoing public consultation, while FINMA’s enforcement decision remains pending before the Swiss Federal Administrative Court.