BankAr-Cod - Argumentative practices adopted by Swiss banks

The compliance activities of banks and their obligation to monitor more closely their clients have increased substantially with the emerging of international and national legislations combating money laundering and terrorism financing (AML&ATF). In case of reasonable suspicions that the client´s funds are bound to a criminal activity, banks must file a report to the Money Laundering Reporting Office Switzerland (a division of the Federal Police), in which their suspicions have to be argumentatively justified. At the same time, none of the bank´s members should inform the client about the suspicions and the related denouncing. This creates a dilemma for bankers who are expected to serve their clients with the due confidentiality and trustworthiness. Not less important, these obligations may endanger the quality of the interpersonal relationship between the banker and the client, which is indispensable for the fulfillment of the banking business, in particular when an eventually innocent client comes to know of having been suspected and denounced. This 3-year research project, financed by the SNSF (Interdisciplinary projects), studies such a complex issue through an interdisciplinary perspective combining legal, banking-economical and argumentative aspects. The banking-economical component analyzes the fundamental measures and policies activated by Swiss banks in order to comply with these new tasks. The legal component focuses, in particular, on (1) defining more clearly the nature and extent of the conflict between AML&ATF requirements and confidentiality obligations; and (2) clarifying the undetermined legal concept of ´reasonable suspicion´ integrating, for this purpose, the competences in semantic analysis held by the project members pertaining to the argumentative component. The latter investigates the argumentative practices that bankers adopt in three activities implied by these norms: (a) in deciding whether a report must be filed; (b) in motivating the suspicion in the reporting form; (c) in managing the relationship with the client before, during and after a report has been made. Methodologically, the research combines the analysis of documents provided by banks and a set of interviews made to compliance officers and relationship managers of Swiss banks. The results will shed light on the practical implications of the AML&ATF norms of banking institutions and on banks individual employees and, in particular through the identification of best practices, will allow suggest guidelines for improving the management of this complex task.