Compliance guide
Internal directives on combating money laundering
Updated: · Leutrim Miftaraj, FLIORE · Editorial standards · Other languages: Deutsch · Français · Español
Short answer
Internal directives translate the statutory due diligence obligations into the processes of a specific family office: who is responsible, by which criteria risks are rated, how identification, monitoring and clarifications work, when and how reports are made and how staff are trained. They must be in writing, adopted by senior management and updated regularly.
What internal directives are for
The law says what must be done; the directives say how it is done in-house. They give staff certainty, ensure consistent decisions and are the first benchmark in any audit. An audit firm first checks whether the directives comply with the law, and then whether practice follows the directives.
In Switzerland, the AMLO-FINMA requires supervised financial intermediaries to have internal directives; self-regulatory organisations set similar requirements. In Germany they are part of the internal safeguards under section 6 GwG, in Austria part of the strategies and procedures under the FM-GwG.
Mandatory contents
- Responsibilities: anti-money laundering unit or money laundering reporting officer, deputy, escalation paths.
- Criteria for higher risks and the measures that follow from them.
- The process for identification and establishing beneficial owners.
- Monitoring of transactions and criteria for anomalies.
- Procedure in case of suspicion and reporting channels to the competent reporting office.
- Retention, training and internal controls.
How good directives come about
- Start with the risk analysis of your own business: which clients, countries and products shape the family office?
- Compare with the statutory requirements and the rules of the supervisor or SRO.
- Describe processes as they are actually meant to happen – with forms and templates.
- Have senior management adopt them and make them known to all staff.
- Review them at least annually and whenever the law changes; keep versions of every change.
Common weaknesses
Directives copied from a template that describe activities the family office does not carry out at all; directives that have not been updated for years; criteria without concrete measures. The opposite is just as problematic: directives so detailed that no one can follow them in day-to-day work.
In FLIORE
FLIORE maps central elements of the directives in the system: risk criteria in the risk assessment, review intervals per rating, approvals under the four-eyes principle and controls with due dates. The compliance academy supports training, and the audit trail shows that the processes were actually followed.
At a glance
| Legal bases | AMLO-FINMA (CH), section 6 GwG (DE), FM-GwG (AT) |
|---|---|
| Adoption | By senior management, in writing |
| Review | At least annually and when the law changes |
Terms on this page
- Beneficial owner
- The natural person who ultimately owns or controls a company, foundation or trust, or on whose behalf a transaction is carried out.
- Four-eyes principle
- Control principle under which important transactions, such as payments, are checked and approved by a second authorised person.
- Money laundering reporting officer
- The person at management level responsible for compliance with anti-money-laundering rules; mandatory in Germany for certain obliged entities under section 7 GwG.
- Audit trail
- An unalterable log that records who created, changed, approved or deleted which data and when.
Frequently asked questions
Does a small family office need its own directives?
Yes, if it is subject to anti-money laundering law. Scope and level of detail may reflect its size. A family office with three employees does not need a hundred pages, but it does need clear rules for the essential processes.
Can an SRO's directives be adopted?
Model directives of a self-regulatory organisation are a good starting point. They must, however, be adapted to the family office's own activities and risk analysis.
Who must know the directives?
All staff who deal with clients, structures or payments. Acknowledgement should be documented, for example as part of the annual training.
What happens if practice departs from the directives?
That is an audit finding. Either practice is corrected or the directive is adapted – deviations without a basis count as an organisational deficiency.
How long should internal directives be?
As long as necessary, as short as possible. Many family offices manage with a main document of ten to twenty pages, supplemented by forms and checklists. What matters is that every member of staff can quickly find their own obligations in it.
Sources
- FINMA – Anti-Money Laundering Ordinance FINMA (AMLO-FINMA)
- German Money Laundering Act (GwG), section 6 – Internal safeguards
- Austrian Financial Markets Anti-Money Laundering Act (FM-GwG) – Legal Information System (RIS)
- Swiss Anti-Money Laundering Act (AMLA/GwG, SR 955.0) – Fedlex
This page provides orientation and does not replace legal or tax advice. The cited legal sources in their applicable version are authoritative.
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