FINMA Credit Suisse FIFA Failings

• Announced the conclusion of two investigations into AML failings at Credit Suisse.

Overview

• An investigation identified deficiencies in anti-money laundering due diligence, re suspected corruption involving FIFA, Petrobras, Petróleos de Venezuela (PDVSA).
• Second re significant business relationship with politically exposed person (PEP).
• Deficiencies in AML process and bank's control mechanism and risk management.
• Ordered measures to improve AML, speed up implementing steps already initiated.
• Will commission independent third party to monitor implementation, effectiveness.

FIFA, Petrobras, PDVSA

• Shortcomings in identifying client, determining the beneficial owner, categorizing relationship as posing increased risk, clarifications, plausibility check, documents.
• Shortcomings occurred repeatedly over a number of years, mainly before 2014.
• Above-average faults in relationships opened by former subsidiary Clariden Leu.
• The bank still has no automated comprehensive overview of client relationships.
• Credit Suisse has been in process of implementing single client view since 2015.
• Progress has been made, but still to be extended outside the Compliance unit.

Politically Exposed Person

• FINMA initiated enforcement proceedings in 2016 and appointed an investigator.
• Bank was too slow to identify and treat the PEP client as posing increased risks.
• Due diligence and corresponding documentation re relationship were incomplete.
• Failed to meet heightened due diligence obligations re investigation, plausibility
  checks and documentation reg client and certain related high-risk transactions.
• Bank failed to adequately record, contain, monitor the risks arising from the PEP
  relationship and responsible (criminally convicted) client relationship manager.
• Relationship manager was very successful in terms of assets under management.
• Manager breached the bank's compliance regulations repeatedly and on record.
• Instead of disciplining, bank rewarded with high payments, positive assessment.
• Identified organisational deficiencies and lack of effective corrective intervention.

Measures to Strengthen AML

• Bank has addressed situation and adopted several measures since the end 2015
  to strengthen its compliance in general and so as to combat money laundering.
• Cooperated with FINMA, which acknowledges improvements, some substantial.
• However, it has decreed additional measures to complement the bank’s actions.
• Designed to further improve bank’s governance, organisation, risk management.
• Remediate relevant control systems, processes, prove higher-risk relationships,
  transactions are adequately detected, categorized, monitored and documented.
• Must implement single client view for all relationships, functions by end 2019.