Credit Suisse faces fines for lending business in Mozambique

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Credit Suisse has announced settlements with UK, Swiss and US authorities in connection with loans to state-owned companies in Mozambique, with Swiss financial market regulators placing new restrictions on the bank’s top drawer, saying it is “seriously” in breach of money laundering requirements in the case.

The Zurich-based bank expects a charge of $ 230 million in connection with the settlements in the third quarter. It said that the U.S. agreement was about $ 275 million and that it planned to pay a fine of about $ 200 million and loaned $ 200 million to the Mozambican government in an agreement with UK regulators. Dollars to forgive.

The Swiss financial market supervisory authority FINMA said that Credit Suisse had violated its duty to “report suspicious activity” in the case and that the risks involved in some lending transactions with governments were not properly recognized.

In 2013, the bank’s UK subsidiaries arranged two loans guaranteed by the Mozambican government totaling $ 1 billion – nearly 6% of the country’s economic output – to state-owned companies ProIndicus and Empresa Mocambiana de Atum or EMATUM the Swiss authority with. The loans should mainly be used to pay for security ships and a tuna fleet, it said.

“Large loans to financially weak or corruption-prone countries are associated with high reputational risks,” said FINMA. “In connection with loans to state-owned companies in Mozambique, Credit Suisse massively violated the organizational requirements and reporting obligations (money laundering law) in 2013.”

The Swiss agency said Credit Suisse has already taken some steps to improve its risk management and control systems, but it will hire an independent third party to review the measures taken and ensure they are effective.

Credit Suisse’s existing lending business with “financially weak and corruption-prone countries or companies with guarantees from such countries” would also have to be examined by an independent third party.

Two years ago, US prosecutors charged five people, including former Credit Suisse bankers Andrew Pearse, Surjan Singh, and Detelina Subeva, with a $ 2 billion fraud involving sham marine, fishing and fishing other projects in Mozambique went.

The late Tuesday announcements will close the UK, Swiss and US cases.

The Mozambique case, which dates back to activities between 2013 and 2016, shows another episode of difficulties for Credit Suisse. At the beginning of the year, FINMA announced that it would be examining possible penalties against Credit Suisse for announcing losses in the billions in connection with the failure of margin calls from the US Archegos Capital.


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