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U.S. probes sanctions evasion targeting Russia through Credit Suisse Swiss bank - Bloomberg

U.S. probes sanctions evasion targeting Russia through Credit Suisse Swiss bank - Bloomberg Credit Suisse (Getty Images)

The U.S. Department of Justice has intensified its investigation into Swiss banks Credit Suisse and UBS over suspicions of non-compliance with requirements, allowing Russian clients to evade sanctions, Bloomberg reports.

What began as a series of subpoenas sent to a range of banks early this year has developed into a full-scale investigation focusing on Credit Suisse, according to sources cited by the media.

The U.S. Department of Justice informed American lawyers at UBS about potential sanctions violations by Credit Suisse since UBS acquired its smaller rival in June, sources said. The DoJ is also looking into possible compliance failures at UBS.

According to people familiar with the matter, the probe is still at an early stage and may not result in charges or a settlement. "Still, it comes at a delicate time for the Zurich-based bank, which is absorbing thousands of employees from Credit Suisse. Along with Credit Suisse’s business, which boosted its wealth management business by almost a third to over $4 trillion, UBS also inherited Credit Suisse’s legal woes, the main cause of its collapse in March," the media says.

The DoJ has asked for information about how the banks handled the accounts of sanctioned clients over the past several years but has not requested interviews with executives or staff yet, one of the people said. The probe covers both restrictions imposed after Russia’s invasion of Ukraine in 2022 and previous rounds put in place following its 2014 annexation of Crimea, another person said. More than a thousand wealthy Russians have been blacklisted by the U.S. over the last decade.

U.S. stance

According to sources inside the DoJ, officials saw the takeover as an opportunity to advance the Credit Suisse investigation

Investigators have taken requests for information to UBS directly, rather than routing them through official diplomatic channels, which can be slower. Formally, any requests for help from foreign prosecutors must be funneled through the Swiss Federal Office of Justice, except in rare cases of cooperation. The FoJ says that to date it’s received no requests related to Credit Suisse, UBS, and Russian sanctions.

"Privately, U.S. officials have expressed frustration at what they see as Switzerland not doing enough to enforce sanctions on Russia and combat money laundering that’s helping the Kremlin keep its economy humming despite the restrictions imposed by the US and its allies over its invasion of Ukraine," the statement says.

The US points to Switzerland’s refusal to join a multilateral task force chasing illicit Russian holdings and the earlier decision to unfreeze some assets in a high-profile corruption case with links to the Kremlin.

Before the invasion of Ukraine, Credit Suisse was well known for catering to wealthy Russians, managing more than $60 billion of their assets at its peak.

By the time of the invasion in February 2022, that number had fallen to $33 billion, still 50% more than UBS, despite the latter’s larger wealth management business.

In March, Swiss banking giant UBS acquired Credit Suisse, which was on the brink of collapse. The transaction amount was 3 billion Swiss francs.

During the investigation, the United States Senate Committee on the Budget found evidence that Credit Suisse serviced the accounts of high-ranking officials until 2020.