Switzerland’s regulator has claimed that Credit Suisse has failed to adequately fight money laundering in suspected corruption cases.
The Swiss Financial Market Supervisory Authority (FINMA) also said the bank fell short of its obligations to fight corruption while managing “a significant business relationship” with a politically exposed person.
Its enforcement action emerged from FINMA’s investigation into several Swiss financial institutions starting in 2015 in relation to suspected corruption involving the International Federation of Association Football (FIFA), Brazilian oil corporation Petrobras and the Venezuelan state oil company PDVSA.
Following the inquiry, FINMA commissioned an investigation to establish the relevant facts at Credit Suisse, covering the period from 2006 to 2016.
FINMA determined through its enforcement procedure that Credit Suisse AG had infringed its anti-money laundering supervisory obligations in all three instances. The established shortcomings included identifying the client, determining the beneficial owner, categorising a business relationship as posing an increased risk, performing the necessary clarifications upon increased risk plus associated plausibility checks, and documentation.
It claims the shortcomings occurred repeatedly over a number of years, mainly before 2014.
FINMA said it will appoint an independent auditor to oversee the bank’s anti-money laundering processes, but it cannot impose penalties as it has no authority to fine banks.
FINMA said in a statement: “The bank has addressed the situation in-house and adopted several measures since the end of 2015 to strengthen its compliance in general and, in particular, to combat money laundering. It also cooperated with FINMA during the procedure.”
While it acknowledges the improvements, it has also decreed additional measures to complement the bank’s actions and restore full compliance with the law. These measures are designed to further improve the bank’s governance, organisation and risk management in the wealth management business.
It said more must be done “to prove that higher-risk business relationships and transactions are adequately detected, categorised, monitored and documented”. In addition, the bank must have implemented the “single client view” for all relationships and for all relevant functions by the end of 2019.
FINMA will appoint an independent third party to review the implementation of these measures, including the measures initiated since 2015, their adequacy and effectiveness.
Copyright © 2018 RegTech Analyst
Copyright © 2018 RegTech Analyst
