I. Admission: concept and legal nature

1 Audit firms and lead auditors act as an extended arm of the self-regulatory organization (SRO) when conducting audits of financial intermediaries supervised by the SRO. Therefore, audit firms and lead auditors must meet the admission requirements when conducting audits on behalf of an SRO.

2 The SRO is responsible for granting licenses to audit firms and lead auditors.

3 There is disagreement in legal doctrine on the question of whether there is a right to licensing by the SRO if the licensing requirements are met: Zysset believes there is a “conditional right” to licensing, so that the situation is comparable to that of a police permit; according to Neese, this is Neese, due to the private-law nature of the legal relationship between the SRO and the audit firm and based on the principle of contractual freedom, this is not generally true; Zufferey, on the other hand, is of the opinion that, due to the performance of a public-law function, the admission decision should be regarded as a contestable ruling.

4 From a legal point of view, SROs are bound by fundamental rights based on the performance of state functions under Art. 35 para. 2 FC and must observe the principles of state action under Art. 5 para. 2 FC. According to the view represented here, the licensing procedure for audit firms and lead auditors is at least bound by the principle of legal equality (Art. 8 FC) and the prohibition of arbitrariness (Art. 9 FC): Thus, licensing decisions that treat audit firms or lead auditors differently despite the same conditions, or rejection decisions that are not based on any objective reasons, are not permissible; furthermore, the audit firm or lead auditor must be granted the right to a legal hearing (Art. 29 para. 2 FC), which in particular entails the right to a reasoned decision. The same applies to the withdrawal of admission or the issuing of a reprimand by the SRO in accordance with Art. 24a para. 4 AMLA in conjunction with Art. 17 AOA.

II. Requirements

5 The system of “dual admission” or “dual-track admission review” applies to the admission of audit firms and lead auditors: In order for both the audit firms and the lead auditors to be admitted, a “basic admission” by the Federal Audit Oversight Authority (FAOA) is required. This basic admission is not re-examined by the SRO, but is merely a requirement. On this basis, the “special legal license” is granted by the SRO.

III. Requirements for the audit firm (para. 2)

6 For the audit firm to be licensed, Art. 24a para. 2 AMLA requires that it is cumulatively (1) licensed by the FAOA, (2) sufficiently organized and (3) does not carry out any other activity requiring a license under financial market laws. Art. 24a para. 5 AMLA would authorize the SRO to provide for further licensing criteria; it should be noted that so far no SRO has made use of this possibility.

A. Licensing as an auditor in accordance with Art. 6 AOA by the FAOA (lit. a)

7 Art. 24a para. 2 lit. a AMLA explicitly refers to Art. 6 AOA and thus to the fact that the governing bodies (in their majority), employees (at least one fifth) and lead auditors (in total) must be licensed as auditors in accordance with Art. 5 AOA. To be licensed as an auditor, you must have a good reputation, have completed training in accordance with Art. 4 para. 2 AOA and have at least one year of professional experience (Art. 5 para. 1 AOA).

8 The licensing of the audit firm by the SRO is exclusively dependent on the formal licensing of the audit firm as an auditor in accordance with Art. 6 AOA: The SRO is not responsible for the substantive examination of the licensing requirements in accordance with Art. 6 AOA.

B. Sufficient organization (lit. b)

9 Pursuant to Art. 24a para. 2 let. b AMLA, the audit firm must be sufficiently organized for this audit. Pursuant to Art. 22a para. 1 AMLO, this is the case if the audit firm cumulatively (1) has at least two lead auditors within the meaning of Art. 24a para. 3 AMLA , (2) has at least two audit engagements in the area of the AMLA no later than three years after the license is granted, and (3) complies with the provisions on documentation and retention of documents in accordance with Article 730c CO.

C. No other activity requiring a license (lit. c)

10 Art. 24a para. 2 lit. c AMLA prohibits an audit firm active in the area of AMLA from engaging in any other activity requiring a license under financial market legislation. Art. 22a para. 2 AMLO extends this prohibition to the following persons: companies under common management with the audit firm (lit. a); natural persons who, directly or indirectly, hold at least 10% of the capital or votes in a company under lit. a or who are otherwise able to exert a decisive influence on its business activities (lit. b); and the lead auditors (lit. c).

IV. Requirements for lead auditors (para. 3)

11 For the licensing of the auditor in charge, Art. 24a para. 3 AMLA requires that he or she is cumulatively licensed by the FAOA (lit. a) and has the necessary specialist knowledge and the required practical experience for the audit (lit. b).

A. Licensing as an auditor by the FAOA in accordance with Art. 5 AOA (lit. a)

12 Art. 24a para. 3 lit. a AMLA explicitly refers to Art. 5 AOA, which requires, in addition to good repute, training in accordance with Art. 4 para. 2 AOA and professional experience of at least one year, as specified in para. 2.

13 As with the licensing of the audit firm, the licensing of the lead auditor by the SRO is also exclusively based on the formal license to practice as an auditor in accordance with Art. 5 AOA: The SRO is not responsible for the substantive review of the licensing requirements under Art. 5 AOA.

B. Specialist knowledge and practical experience (lit. b)

14 Art. 24a para. 3 lit. b AMLA requires the lead auditors to have the necessary specialist knowledge and the required practical experience for the audit. Art. 22b AMLO sets out the minimum requirements: (1) for admission: five years' professional experience in providing audit services in the field of the AMLO, 200 audit hours in the field of the AMLO, four hours of further training in the field of the AMLO AMLA within one year prior to submitting the license application (para. 1); (2) after the license has been granted: 100 audit hours in the area of AMLA in the last four years, four hours of continuing education per year in the area of AMLA (para. 2).

15 Art. 22d AMLO specifies the requirements for continuing education: External and internal training events must cover the area of the AMLA and last at least one hour. At least three people must participate in internal training events. Self-study does not count as training. The actual duration of the training event is counted, unless a specialist lecture or course is given; in this case, double the duration of the lecture or course is counted.

V. Withdrawal of admission / Imposition of a reprimand by the SRO (Para. 4)

16 Art. 24a Para. 4 AMLA stipulates that Art. 17 AOA is applicable by analogy for the withdrawal of admission and the imposition of a reprimand by the SRO. As explained above, the fundamental rights, specifically the principle of equality before the law (Art. 8 FC), the prohibition of arbitrariness (Art. 9 FC) and the right to a fair hearing (Art. 29 para. 2 FC) must be observed not only in the context of the admission procedure but also when withdrawing admission or issuing a reprimand.

Bibliography

Neese Martin, Kommentierung zu Art. 24a GwG, in: Peter Ch. Hsu/Daniel Flühmann (Hrsg.), Basler Kommentar, Geldwäschereigesetz, Basel 2021.

Zufferey Jean-Baptiste, Kommentierung zu Art. 24a GwG, in: Cassani Ursula/Bovet Christian/Villard Katia (Hrsg.), Commentaire Romand, Loi sur le blanchiment d’argent, Basel 2022.

Zysset Pascal, Kommentierung zu Art. 24a GwG, in: Peter V. Kunz/Thomas Jutzi/Simon Schären (Hrsg.), Stämpflis Handkommentar (SHK) zum Geldwäschereigesetz (GwG), Bern/Zürich 2017.