Wednesday, January 20, 2021

Swiss bank Banca Credinvest accused of anti-money laundering failures over PDVSA dealings

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The Swiss Financial Market Supervisory Authority (FINMA) announced Tuesday its finding that Banca Credinvest, an independent Swiss bank, “seriously breached” anti-money laundering (AML) regulations with regard to dealings with Venezuelan state-owned and state-controlled energy company PDVSA.

The findings conclude an investigation FINMA launched in November 2018. According to the agency, between 2013 and 2017, Banca Credinvest breached its duty of due diligence in relation to AML regulations by failing to adequately identify its clients or beneficial owners and by failing to sufficiently monitor these clients’ transactions. Banca Credinvest further “documented the processes incompletely and reported suspicious activity to [money-laundering reporting officers] too late,” FINMA said.

FINMA’s announcement did not include mention of a fine placed upon the bank. Instead, Banca Credinvest was ordered to enhance its AML compliance measures. “Among other things, the bank must monitor all private banking clients in order to identify increased money-laundering risks and adequately mitigate these,” FINMA said. “In addition, as decided by the bank itself, it must rapidly withdraw from all client relationships with a connection to Venezuela and may not accept any new high-risk clients (e.g. politically exposed persons) for three years or until all measures have been implemented and reviewed at a later stage.”

Broader enforcement trend

Banca Credinvest is not the only firm to get caught in the PDVSA corruption case. In February 2020, FINMA found AML compliance shortcomings at Julius Baer Group connected to PDVSA—which presents a good case study for compliance officers on what the bank did to enhance its risk management and AML compliance controls. In a second example, in September 2018, FINMA also found deficiencies in the AML processes of Credit Suisse in connection with PDVSA, among other suspected corruption activity.

“FINMA continues to designate money laundering as a major risk to the Swiss financial services industry,” the agency stated. “Correspondingly, the issue remains a core part of its supervisory activities.”

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