More Swiss banks slammed for Venezuela business

It took FINMA five years to wrap up its investigation into Swiss banks dealing with people linked to Venezuela's state oil company. Keystone/Martin Ruetschi

Switzerland’s financial regulator has reprimanded two more banks for breaching money laundering rules. The decisions on Thursday wrap up a five-year investigation into banks’ dealings with people linked to Venezuela’s state oil company PDVSA.

The Financial Market Supervisory Authority (FINMA) watchdog contacted 30 Swiss banks during its investigation. It has already taken issue with two former chief executives of private bank Julius Bär and rapped Credit Suisse for anti-corruption failings.

FINMA has now reprimanded five banks in total since the investigation began in 2016.

In the final case disclosed on Thursday, the regulator criticised Lugano-based Banca Zarattini and CBH Compagnie Bancaire Helvétique in Geneva.

FINMA foundExternal link that both Banca Zarattini in the period between 2014 and 2018 and CBH Bank between 2012 and 2020 breached obligations to combat money laundering and their duties to implement an appropriate risk management policy, a serious infringement of supervisory law, FINMA said.

“Both banks failed to carry out sufficient economic background clarifications into business relationships and transactions with increased money-laundering risks. Adequate documentation was also lacking in these areas,” it said.

Sanctions and measures

FINMA imposed a temporary ban on Banca Zarattini on accepting new Venezuelan and politically exposed persons as clients.

The measures imposed on CBH Bank include the termination of all remaining business relationships with Venezuelan clients.

In addition, CBH must review other especially risky client relationships and terminate these if necessary, FINMA said.

Banca Zarattini said it accepts without reservations the conclusions reached by the regulator.

It added that the shortcomings only referred to a limited period of time and a limited number of clients. It also said it contacted FINMA as soon as it became aware of potential problems and cooperated extensively with the inquiry. It had since improved its anti-money laundering and compliance systems, it said.

“Much information about our bank in relation to Venezuelan clients was disseminated in the media in recent years. The result mentioned above puts an end to all speculations. CBH underlines that FINMA has not pronounced any sanctions, both financial and non financial,” CBH said in a statement following the release of the financial regulator’s decisions.