Citation: Simone Nadelhofer, Benoît A. Mauron, Deborah Hondius, Michael Neuman, Tax offences as predicate offences to money laundering - Key takeaways for practitioners, in zsis) 4/2021, A20, N [...] (publ.zsis.ch/A20-2021)
Art. 305bis(1bis) of the Swiss Criminal Code entered into force on 1 January 2016 to include aggravated tax misdemeanours as predicate offences to money laundering. Switzerland introduced this provision to comply with FATF standards.
Aggravated tax misdemeanours qualify as predicate offences to money laundering if cumulatively, (i) the relevant conduct meets the requirements of Art. 186(1) FDTA or Art. 59(1) FTHA and (ii) the unduly avoided taxes exceed CHF 300,000 per tax period.
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Art. 305bis(1bis) of the Swiss Criminal Code entered into force on 1 January 2016 to include aggravated tax misdemeanours as predicate offences to money laundering. Switzerland introduced this provision to comply with FATF standards.
Aggravated tax misdemeanours qualify as predicate offences to money laundering if cumulatively, (i) the relevant conduct meets the requirements of Art. 186(1) FDTA or Art. 59(1) FTHA and (ii) the unduly avoided taxes exceed CHF 300,000 per tax period. Fraud in relation to indirect taxes does not fall under this provision, but is considered a felony and therefore a predicate offence to money laundering under Art. 305bis(1) SCC. Tax offences committed abroad establish jurisdiction for Swiss authorities to prosecute acts of money laundering, provided that the same act is punishable in the relevant State and simultaneously qualifies as a felony or an aggravated tax misdemeanour under Swiss law.
Although the moment when (aggravated) tax misdemeanour is committed is undisputed, the moment when resulting money laundering occurs is highly debated and has yet to be clarified by courts.
As tax offences generally generate illicit savings rather than illicit profits, another outstanding question is how criminal proceeds of (aggravated) tax misdemeanours can be localized. It is generally accepted that criminal and clean funds should be considered commingled in a specific bank account of the perpetrator. However, it is unclear whether and on which conditions subsequent transfers out of said account qualify as money laundering. The classification of the funds in the account as tainted or clean depends on whether the authorities employ the “First in First Out” or ”Last in First Out” approach. While other jurisdictions have clarified their respective positions, Switzerland is yet to do the same.
Art. 305bis(1bis) SCC is also relevant for financial intermediaries who must implement new measures to detect and report assets suspected of originating from predicate aggravated tax misdemeanours. These intermediaries also risk potential criminal liability for money laundering for having carelessly allowed fund transfers despite suspicions of the criminal origin of the funds.
Currently, Art. 305bis(1bis) is primarily relevant in the context of mutual legal assistance in criminal matters. Although Switzerland has historically been and remains reluctant to grant mutual legal assistance in criminal matters for unqualified tax offences (especially tax evasion), such requests are now generally accepted if based on allegations of money laundering predicated upon aggravated tax misdemeanours under Swiss law.
While courts have not yet clarified legal uncertainties regarding this new provision, pressure from foreign States in tax related matters could result in an increase in such cases in the future.
Art. 305bis(1bis) of the Swiss Criminal Code (SCC) entered into force on 1 January 2016 to include aggravated tax misdemeanours as predicate offences to money laundering.
This amendment to the SCC was introduced to comply with the recommendation of the Financial Action Task Force (FATF) of February 2012, pursuant to which serious tax crimes related to direct and indirect taxes were to be considered predicate offences to money laundering.<a id="footnote-01" class="footnote" h
