Due Diligence Policy Template for Switzerland

A Due Diligence Policy guides organizations through the steps they must take to thoroughly evaluate business relationships and transactions under Swiss law. It sets clear standards for investigating potential partners, investments, and deals while helping companies meet their obligations under Swiss anti-money laundering regulations and the Financial Market Supervisory Authority (FINMA) requirements.

The policy typically outlines specific procedures for verifying client identities, assessing risk levels, monitoring transactions, and maintaining proper documentation. For Swiss businesses, especially in banking and financial services, a robust due diligence policy helps protect against legal risks, maintain regulatory compliance, and build trust with stakeholders. It serves as a practical framework for staff to follow when conducting background checks and risk assessments.

Swiss organizations need a Due Diligence Policy when entering new business relationships, especially in financial services, real estate, or commodity trading. This becomes crucial before mergers, acquisitions, major investments, or when onboarding high-value clients where thorough background checks are essential under FINMA regulations.

The policy proves particularly valuable during regulatory inspections, helping demonstrate compliance with Swiss anti-money laundering laws. It's also essential when expanding into new markets, partnering with foreign entities, or handling transactions that require enhanced scrutiny. Many Swiss banks and financial intermediaries use it daily to screen clients, assess risks, and document their verification processes.

• Standard Due Diligence Policy: Core procedures for basic client verification and risk assessment, commonly used by small-to-medium Swiss businesses
• Enhanced Due Diligence Policy: More rigorous checks for high-risk clients or transactions, required by Swiss banks and financial institutions under FINMA guidelines
• Industry-Specific Policy: Tailored versions for real estate, commodities trading, or wealth management, incorporating sector-specific risk factors
• Group-Level Policy: Comprehensive frameworks for large Swiss corporations, covering multiple subsidiaries and cross-border operations
• Simplified Due Diligence Policy: Streamlined procedures for low-risk situations, while maintaining compliance with Swiss anti-money laundering regulations

• Financial Institutions: Banks, wealth managers, and securities dealers must maintain Due Diligence Policies to comply with FINMA requirements
• Compliance Officers: Develop, implement, and update the policies while ensuring staff follow proper verification procedures
• Board Members: Review and approve policies, ensuring they align with corporate strategy and risk appetite
• Front-line Staff: Execute daily due diligence checks following policy guidelines when dealing with clients
• External Auditors: Review policies during annual audits to verify compliance with Swiss regulations
• Legal Counsel: Draft and revise policies to ensure alignment with current Swiss laws and regulatory requirements

• Risk Assessment: Map your organization's specific risk areas and compliance obligations under Swiss law
• Industry Requirements: Gather relevant FINMA guidelines and sector-specific regulations for your business type
• Internal Processes: Document existing verification procedures and identify gaps in current practices
• Staff Capabilities: Assess your team's capacity to implement different levels of due diligence checks
• Technology Review: Evaluate available tools for client screening and transaction monitoring
• Documentation Systems: Plan how you'll record and store due diligence findings securely
• Review Structure: Establish clear approval chains and escalation procedures for high-risk cases

• Purpose Statement: Clear objectives and scope of due diligence activities under Swiss law
• Risk Classification: Defined criteria for categorizing clients and transactions by risk level
• Verification Procedures: Specific steps for identifying and validating client information per FINMA guidelines
• Documentation Requirements: Required records and retention periods for due diligence findings
• Monitoring Protocols: Procedures for ongoing transaction surveillance and relationship reviews
• Escalation Framework: Clear processes for handling suspicious activities or high-risk situations
• Data Protection Measures: Compliance with Swiss data privacy laws in information handling
• Review Mechanism: Schedule and process for updating the policy to reflect regulatory changes

A Due Diligence Policy often gets confused with a Due Diligence Checklist, but they serve distinct purposes in Swiss business operations. While both support compliance and risk management, their roles and applications differ significantly.

• Scope and Purpose: A policy provides comprehensive guidelines and principles for conducting due diligence across all business activities, while a checklist is a specific tool for executing individual due diligence tasks
• Legal Standing: The policy serves as a binding organizational document that meets FINMA requirements, whereas a checklist functions as a practical implementation tool
• Duration and Updates: Policies require formal review and updates to align with regulatory changes, while checklists can be modified more frequently for operational efficiency
• User Application: Senior management and compliance teams own the policy document, while front-line staff regularly use checklists for day-to-day verification tasks