What Does Article 12(1) AMLO-FINMA Provide?

Under this provision, a card issuer is exempt from the obligation to retain identification documents of its customers — including those of the contracting party, the beneficial owner, and the controlling person — provided that it has entered into a formal delegation agreement with a Swiss-licensed bank.

This agreement must ensure that the bank:

• Performs the KYC and AML checks on the cardholders;

• Provides the issuer with identification details and notifies it if any customer qualifies as a politically exposed person (PEP);

• Informs the issuer of any changes to such information without delay;

• Makes relevant documents available to competent Swiss authorities upon request, via the issuer.

Why Is This an Advantage?

For card issuers, especially those operating in digital or cross-border contexts, this delegation mechanism offers a pragmatic compliance solution that:

• Streamlines onboarding, as the issuer does not need to collect or retain KYC documents itself;

• Reduces administrative burden, enabling reliance on the bank's established AML framework;

• Maintains regulatory compliance, with a clear division of responsibilities between the bank and the issuer.

Notably, this framework is limited to Swiss banks — foreign banks do not qualify — and applies to payment instruments that may also allow cash withdrawals.

Practical Implications of Art. 12 I AMLO-FINMA for Your Business

For companies planning to launch or operate card programs in Switzerland, leveraging this delegation model can significantly simplify compliance efforts, provided all cumulative conditions of Article 12(1) are met. It also enables the issuer to focus on core business activities, while the licensed bank handles the complex regulatory requirements related to customer due diligence.

At SynHedge, we assist financial institutions and fintechs in structuring compliant delegation agreements tailored to their operational models.

Need advice on delegation frameworks under Swiss AML law?

Contact us to explore how your card program can benefit from this strategic exemption.