A new law, dubbed “Lex FIFA”, passed in Switzerland means that sports officials, such as those from FIFA, the International Olympic Committee, and Formula 1 will be subject to additional scrutiny in the compliance process, like Politically Exposed Persons are already.
This is an interesting development in that it acknowledges the strong influence between sports and politics and places the sporting organizations in a special “high risk” category. With this development, it becomes increasingly important to address KYC (Know Your Customer) responsibility within professions required to guard against money laundering. Adequate procedures and resources must be deployed to mitigate risk. This can only be done by selecting well trained and knowledgeable staff in sufficient quantity and equipping them with the tools and procedural guidelines to perform effectively. List checking must not be relied on as the sole mitigation tool for money laundering risk.
Automated “list checking” solutions for identifying money laundering risk are but a first line defense. As the nature of risk becomes more apparent, it will be increasingly necessary to rely on “open source” research tools, such as KYC3, in order to conduct judgement calls on a case by case basis that take into account contextual information. The inclusion of general news, not just negative news, and of general business relationship information becomes necessary in order to evaluate the context and potential beneficiaries of proposed customer relationships and transactions.
This Swiss law is the first of its kind and other countries and international organizations, such as FATF-GAFI, can be expected to follow with regulations and guidelines of their own.
For more details on Lex FIFA, please refer to Swissinfo.ch