Swiss prosecutors have indicted a former Credit Suisse executive. Additionally, they have charged UBS with corporate negligence. This legal action connects to a money laundering case involving state-owned companies in Mozambique.
The indictment is the latest fallout from the “Mozambique Debt Scandal.” This controversy involves over $2 billion in loans granted to three state enterprises in 2013. UBS acquired Credit Suisse two years ago. Now, the banking giant faces criminal liability for allegedly failing to stop illicit financial flows.
The $7.9 Million Transfer
The legal action focuses on a specific transaction from 2013. It involved the transfer of nearly $7.9 million from Mozambique’s Ministry of Economy and Finance to a Credit Suisse account in Switzerland.
Investigators allege that the bank subsequently transferred most of these funds to accounts in the United Arab Emirates.
According to the charges, a compliance officer noticed red flags. They identified multiple signs that the funds might have criminal origins. However, the official did not flag this suspicious activity to the Swiss money laundering reporting office (MROS). Instead, they reportedly recommended that senior management simply end the commercial relationship without alerting authorities.
Delayed Reporting and Liability
The bank did not report the transaction to the MROS until 2019. Notably, this report came only after the United States Department of Justice started its own criminal proceedings regarding the loans.
Prosecutors argue that the compliance officer’s negligence allowed money laundering to occur. Furthermore, authorities have charged UBS with failing to implement “required and reasonable” measures to stop such activities.
In response, UBS has firmly rejected the findings. The bank announced its intention to vigorously defend its position in court.
A Legacy of Legal Troubles
This case represents another chapter in Credit Suisse’s history of scandals. These troubles plagued the bank prior to its collapse and rescue merger with UBS in 2023.
Since the acquisition, UBS has worked to resolve various legacy issues inherited from its former rival. This includes previous settlements related to the collapse of Archegos Capital Management. Meanwhile, criminal proceedings are also underway against two other individuals connected to the Mozambique financial scandal.
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