FCA fined Credit Suisse for serious financial crime compliance failing
What is happening?
In October 2021, the FCA fined Credit Suisse over £147 million for serious financial crime compliance due diligence failings related to loans worth over $1.3 billion which the bank arranged for the Republic of Mozambique. These loans, and a bond exchange, were tainted by corruption. Credit Suisse also agreed with the FCA to forgive US$200 million of debt owed by Mozambique as a result of these tainted loans.
What do you need to do?
Between October 2012 and March 2016, Credit Suisse failed to properly manage the risk of financial crime compliance within its emerging markets business. It had sufficient information from which it should have appreciated the unacceptable risk of bribery associated with the two Mozambican loans and a bond exchange related to government-sponsored projects.
Credit Suisse was aware that Mozambique was a jurisdiction where the risk of corruption of government officials was high and that the projects were not subject to public scrutiny or formal procurement processes. The contractor engaged by Mozambique on the projects was described as a “master of kickbacks”.
The contractor secretly paid significant kickbacks, estimated at over US$50 million, to members of Credit Suisse’s deal team, including two Managing Directors, in order to secure the loans at more favourable terms. While those Credit Suisse employees took steps to deliberately conceal the kickbacks, warning signs of potential corruption should have been clear to Credit Suisse’s control functions and senior committees. There was insufficient challenge within Credit Suisse or scrutiny and inquiry in the face of important risk factors and warnings. Mozambique has subsequently claimed that the minimum total of bribes paid in respect of the two loans is around US$137 million.
The FCA fine is part of a global resolution agreement involving the US Department of Justice, the US Securities and Exchange Commission, and the Swiss Financial Market Supervisory Authority (FINMA).
How can we help you?
If you’d like to know more about how we can help you with your anti-bribery, corruption arrangements, or financial crime compliance, our expert team is here to help.
Contact us today on 0207 436 0630 – or email info@thistleinitiatives.co.uk.