Credit Suisse laundered money of fraudsters, human rights abusers, sanctioned individuals

Swiss banking giant Credit Suisse was dragged into a dirty money scandal following news reports of the Swiss bank managing the funds of human rights abusers, fraudsters and businessmen who had been placed under sanctions.

A source had leaked information on the accounts, which were held in decades ranging from the 1940s to 2010s, to Germany’s Sueddeutsche Zeitung. The German daily had then shared it with the Organized Crime and Corruption Reporting Project and 46 other news organisations including the New York Times, Britain’s Guardian and France’s Le Monde.

The leak comes at a time when Credit Suisse, which has denied any wrongdoing, tries to shake off a series of risk-management scandals as well as a $1.75 billion (1.6 billion Swiss franc) loss in 2021 which have hammered its stock.

According to a report by the New York Times, the leaked data covered more than 18,000 accounts which aggregate to more than $100 billion.

“For CS, even if the allegations are unfounded, this raises questions about its business practices in wealth management and should tie up management having to spend time fighting fires instead of moving forward,” opined RBC analysts.

“Credit Suisse strongly rejects the allegations and insinuations about the bank’s purported business practices,” said the bank in a statement in response to media reports.

In 2018, Switzerland’s financial watchdog, the Swiss Financial Market Supervisory Authority (FINMA) had rapped Credit Suisse for deficiencies in fighting money laundering.

“Compliance with money laundering regulations has been a focus of our supervisory activities for years now,” said a spokesperson from FINMA.

Following a call from members of the European Parliament to review Switzerland’s banking practices, the finance ministry’s State Secretariat for International Finance said Switzerland meets “all international standards on the exchange of information in tax matters and on fighting against money laundering, terrorist financing and corruption”.

Describing the issue as being “predominantly historical”, Credit Suisse said the information had been taken out of context.

“Approximately 90% of the reviewed accounts are today closed or were in the process of closure prior to receipt of the press inquiries, of which over 60% were closed before 2015,” said Credit Suisse.

“The Swiss financial centre has no interest in money of dubious origin. It attaches the greatest importance to the maintenance of its reputation and integrity,” said the Swiss Bankers Association.

($1 = 0.9167 Swiss francs)

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