UBS and Credit Suisse Face Growing Probe Over Alleged Russian Sanctions Evasion
Two of Switzerland’s largest banks, UBS Group AG and Credit Suisse Group AG, are facing a growing investigation into their alleged involvement in helping wealthy Russians evade U.S. sanctions. The probe is being conducted by the U.S. Department of Justice (DOJ) and the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC).
Background of the Investigation
The investigation began in 2018 when the DOJ and OFAC began looking into the banks’ activities in Russia. The probe is focused on whether the banks helped wealthy Russians move money out of the country in violation of U.S. sanctions. The sanctions were imposed in 2014 in response to Russia’s annexation of Crimea and its support for separatists in eastern Ukraine.
The investigation has been ongoing for several years, but it has recently intensified. In September 2020, the DOJ and OFAC issued subpoenas to UBS and Credit Suisse, demanding documents related to their activities in Russia. The banks have been cooperating with the investigation and have provided the requested documents.
UBS and Credit Suisse’s Response
UBS and Credit Suisse have both denied any wrongdoing. UBS said in a statement that it “has not been accused of any wrongdoing and is cooperating with the investigation.” Credit Suisse also said it is “cooperating fully with the investigation and is confident that it has complied with all applicable laws and regulations.”
Potential Penalties
If the banks are found to have violated U.S. sanctions, they could face significant penalties. The DOJ and OFAC have the authority to impose fines and other penalties, including the seizure of assets. The banks could also be subject to criminal prosecution if they are found to have knowingly violated the sanctions.
Implications for the Banks
The investigation has the potential to have a significant impact on the banks. UBS and Credit Suisse are two of the largest banks in Switzerland, and any penalties or criminal charges could have a major impact on their operations. The banks could also face reputational damage if they are found to have violated the sanctions.
Impact on the Financial Industry
The investigation into UBS and Credit Suisse is part of a larger effort by the U.S. government to crack down on financial institutions that are helping wealthy Russians evade U.S. sanctions. The investigation could have a chilling effect on the financial industry, as banks may be less willing to do business with Russians for fear of running afoul of U.S. sanctions.
Outlook
The investigation into UBS and Credit Suisse is ongoing, and it is unclear when it will be completed. It is also unclear what the outcome of the investigation will be. However, it is clear that the investigation has the potential to have a significant impact on the banks and the financial industry as a whole.