Credit Suisse Is Urged to Improve Money-Laundering Controls

(Bloomberg) -- Credit Suisse Group AG was given until the end of next year to strengthen its internal processes to combat money laundering as Switzerland’s financial regulator concluded a pair of enforcement proceedings against the nation’s second-biggest bank.

The regulator, known as Finma, ordered the Zurich-based lender to ensure that information about particular clients can be accessed more easily by bankers, according to a statement Monday. Credit Suisse, led by Chief Executive Officer Tidjane Thiam, already made “some substantial” improvements in its anti-money-laundering controls and avoided a fine in the probes.

Authorities had been investigating the bank’s relationships with officials of FIFA, soccer’s governing body, as well as its dealings with Brazilian oil company Petrobras and Petroleos de Venezuela SA. FIFA was was rocked by a corruption probe that erupted in 2015, when dozens of soccer executives were arrested in Swiss police raids and the U.S. Justice Department filed charges relating to bribery allegations involving hundreds of millions of dollars. The regulator said that review covered the period from 2006 to 2016.

Compliance costs have been increasing for wealth managers as governments and regulators step up efforts to fight money laundering and tax evasion. The Swiss regulator is also conducting an enforcement proceeding against Julius Baer. Finma had confirmed that it has a number of enforcement proceedings related to money laundering in South America under way and some of them are tied to PDVSA.

Another Finma case focused on Credit Suisse’s relationship with a so-called politically exposed person. Here, the regulator identified deficiencies in the bank’s anti-money laundering controls as well as shortcomings in its oversight of an unnamed banker, identified as Patrice Lescaudron by people with knowledge of the matter.

Credit Suisse “must remediate the relevant control systems and processes, and so prove that higher-risk business relationships and transactions are adequately detected, categorized, monitored and documented," the regulator said in the statement.

Since 2015, Credit Suisse has split its legal and compliance units and created a regulatory affairs and compliance unit that reports to the CEO. Its chief, former investment banker Lara Warner, became a member of the bank’s executive board. The firm also hired an additional 800 people to bolster compliance, and the bank’s board of directors plans to establish a compliance committee.

“We are grateful to Finma for its acknowledgement of the improvements,” the bank said in a separate statement. “We have noted that as a result of this review, Finma has not imposed any fine on Credit Suisse, not ordered any disgorgement of profits or any limitation of business activities.”

Credit Suisse is still being probed in two other legal cases that are related to compliance matters, according to a spokesman for the bank.

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