A/HRC/36/52 28. However, major obstacles to enforcing anti-money-laundering legislation still remain in practice. Regulations are poorly respected and major international scandals involving the Swiss financial market continue to come to light. In the opinion of many experts, the Swiss bank reporting system simply does not work: “It is quite obvious that the rules exist, but they are applied with insufficient care. This also means that regulators are not doing their job.”44 Thus, Swiss banks continue to benefit all too often from judicial impunity. A. Compliance of Swiss banks with anti-money-laundering legislation 29. Swiss banks have traditionally been granted the autonomy to set their own operating rules. 45 The Swiss Financial Market Supervisory Authority, FINMA, is in charge of monitoring all institutions holding a banking licence in Switzerland. Despite being a public control body, FINMA does not belong to the federal administration. Its action is apparently independent from external interferences but not from the banks. The Board of Directors is composed mainly of former bank managers, as is most of its staff. 46 Furthermore, FINMA is financed by the very same institutions that are under its supervision: the banks. 47 30. By law, FINMA is endowed with a great margin of discretion. This includes the capacity to refuse collaboration with criminal prosecutors or any other national authorities when it is considered to be incompatible with a procedure under way or with the aims of surveillance of financial markets. FINMA can also deny information not available to the public or refuse to handle any documentation to preserve its own supervisory procedure. 48 31. The Authority’s annual reports do not provide full information on cases of violation of the bank’s due diligence, particularly regarding politically exposed persons. Even when sanction procedures are considered, information on the entities under investigation, the final outcomes of such procedures or the sanctions imposed are only partially released. 49 32. A 2016 evaluation report on Switzerland by the Financial Action Task Force concluded that the process of reviewing existing customers in the banking sector “is unsatisfactory overall”. 50 More specifically, sanctions imposed by the supervisory authorities were considered insufficient to prevent further violations. 51 Doubts about the efficacy and credibility of the whole anti-laundering dispositive have also been raised by civil society. 33. In fact, lack of transparency on accountability procedures undertaken against the banks may lead to the conclusion that they are still accepting “dirty money” “below the radar” and that such activities continue to go unnoticed by the general public. 52 This situation may demonstrate that the financial sector has gained such great power and lobbying capacity as to allow it to avoid taking seriously its obligations to undertake preventive measures and cooperate with public authorities in this field. 44 45 46 47 48 49 50 51 52 10 O. Longchamp and M. Herkenrath, “Money-laundering, liability and sanctions for financial intermediaries — the issue of having the assets of politically exposed persons in Switzerland”, in Fenner Zinkernagel, Emerging Trends in Asset Recovery, p. 128; “Banks scrutinize regimes’ assets”, Wall Street Journal, 23 February 2011. In 2015, the Swiss Financial Market Supervisory Authority, FINMA, approved the Swiss banks’ code of conduct with regard to the exercise of due diligence, drafted by the Swiss Association of Bankers. The current FINMA Director, Mark Branson, is a former Director of UBS and was previously in charge of UBS Japan, involved in the scandal of the manipulation of the Libor rate. The Authority’s costs are borne by the supervisory fees and levies paid by those institutions. See article 40 of the Loi sur l’Autorité fédérale de surveillance des marchés financiers (Loi sur la surveillance des marchés financiers). Longchamp and Herkenrath, “Money-laundering”, p. 133. Anti-Money-laundering and Counter-Terrorist Financing Measures: Switzerland: Mutual Evaluation Report, December 2016, pp. 91 and 105. FINMA sanctions are particularly painless for banks; see “Trois banques épinglées pour leur gestion de fonds”, 24 Heures, 21 October 2013. O. Longchamp, report on Switzerland’s experience of assets recovery, working document, Public Eye (forthcoming).