The Suisse Secrets investigations, which were published by the Organized Crime and Corruption Reporting Project (OCCRP), Süddeutsche Zeitung, The Guardian, and 45 other news organizations, reveal previously unknown breaches, suspect clients, and the amount of dirty money recycled by Credit Suisse, one of Switzerland’s largest banks. Following yet another major bank scandal, governments around the world must take urgent action against these professional financial crime accomplices.
Credit Suisse allegedly banked with high-risk clients despite substantial red flags, according to secret papers leaked. Even though the bank stated that it would crack down on dubious cash, the problem persisted. Journalists have uncovered scores of shady consumers from all over the world, including politically exposed individuals, dating back to the 1940s and up until the last decade. Credit Suisse has denied the charges and stated that it has done all necessary procedures in relation to flagged accounts, but the findings of journalists imply otherwise.
According to the investigations, the bank held US$273 million for Venezuelans accused of diverting funds from the state-owned oil company Petroleos de Venezuela, S.A. (PDVSA). Even after several of them pled guilty to corruption charges, their accounts were apparently kept active. Venezuela is on the verge of financial disaster as a result of rampant misappropriation of state funds. The country’s score on Transparency International’s Corruption Perceptions Index has dropped considerably over the last decade, with one of the lowest scores in the world in 2021.
An subsequent examination by OCCRP reveals the bank’s continuous marketing of concealment in order to recruit customers with dubious funds, which is alarming. Instead of asking the essential questions to block dirty money, the bank advised ways to help a putative African investment remain anonymous, such as establishing complex organizational structures and ensuring absolute anonymity, even inside the bank.
Furthermore, the released records shed light on the corporate culture at one of the world’s most powerful and well-funded institutions. Payment of fines to assist clients in evading taxes or concealing laundered funds is considered as a necessary cost of doing business. This is a culture that undermines compliance, promotes irresponsible risk-taking, and fosters money laundering and corruption.
The International Consortium of Investigative Journalists (ICIJ) and other media sources revealed in the FinCEN Files investigations in 2020 that banks, including Credit Suisse, delayed reporting suspicious behaviour to US authorities. They appeared to wait until the clients’ involvement in corruption or money laundering was disclosed elsewhere before doing so.
Maíra Martini, the anti-money laundering expert at Transparency International, said:
“The Suisse Secrets investigations prove once again that banks cannot be trusted to police themselves. The public is tired of hearing about how banks help corrupt officials from around the world launder their money – and how they will do better next time. Whistleblowers and journalists do valiant work to report on such violations, but waiting every six months for the next drop of incriminating papers is not an effective practice. Instead, the authorities should be promptly detecting and preventing the recurrence of money laundering. A slap on the wrist when banks’ repeated offences are uncovered is not enough.
“As a global community, we need to clamp down on banks that serve corrupt interests, keeping their outsized influence on political decision-making in check. Global leaders need to end the abuse of the financial system and rethink approaches to supervision and enforcement.”
In the immediate wake of the revelations, Transparency International calls for: • Central beneficial ownership registers with verified information. In many countries, authorities rely on banks to identify those with controlling influences over anonymous companies. As Suisse Secrets demonstrate, this is a very flawed approach. Transparency International is calling for central registers with verified information to become mandatory as part of the ongoing review of the global standard on beneficial ownership transparency. In October 2021, the Financial Action Task Force (FATF) proposed amendments to support such measures worldwide. FATF’s 39 members are expected to vote on and decide what the new standard will look like during their next plenary meeting which kicks off tomorrow, 21 February. • Active supervision mechanisms. Banks are the financial system’s gatekeepers – and they are not doing their jobs. National supervisory authorities need to ramp up their efforts so we don’t have to rely only on courageous whistleblowers and leaks to learn the truth. Assessments should be regular and not just punitive after a scandal is already public. Governments have previously pledged to close this door to dirty money but resourcing on national supervisory and law enforcement authorities remains a problem. • Dissuasive sanctions for banks and senior managers. Bank executives have little incentive to check high-risk clients and say no to dirty money as long as they do not face effective and dissuasive sanctions. Punitive action against individual bankers is also rare, especially those at the top who establish and maintain cultures in support of dirty money. • Strategic intelligence work. The Common Reporting Standard (CRS), which more than 100 countries participate in, requires banks to identify non-resident clients and report them to their local tax administrations. The use of the information collected under CRS should be expanded to tackle corruption and money laundering, and information should be shared with relevant competent authorities in other countries. In addition, Transparency International calls for bank account registers with beneficial ownership data that can be directly accessed by competent authorities and for improved exchange of information on cross-border payments.
In the immediate wake of the revelations, Transparency International calls for:
• Central beneficial ownership registers with verified information. In many countries, authorities rely on banks to identify those with controlling influences over anonymous companies. As Suisse Secrets demonstrate, this is a very flawed approach. Transparency International is calling for central registers with verified information to become mandatory as part of the ongoing review of the global standard on beneficial ownership transparency. In October 2021, the Financial Action Task Force (FATF) proposed amendments to support such measures worldwide. FATF’s 39 members are expected to vote on and decide what the new standard will look like during their next plenary meeting which kicks off tomorrow, 21 February.
• Active supervision mechanisms. Banks are the financial system’s gatekeepers – and they are not doing their jobs. National supervisory authorities need to ramp up their efforts so we don’t have to rely only on courageous whistleblowers and leaks to learn the truth. Assessments should be regular and not just punitive after a scandal is already public. Governments have previously pledged to close this door to dirty money but resourcing on national supervisory and law enforcement authorities remains a problem.
• Dissuasive sanctions for banks and senior managers. Bank executives have little incentive to check high-risk clients and say no to dirty money as long as they do not face effective and dissuasive sanctions. Punitive action against individual bankers is also rare, especially those at the top who establish and maintain cultures in support of dirty money.
• Strategic intelligence work. The Common Reporting Standard (CRS), which more than 100 countries participate in, requires banks to identify non-resident clients and report them to their local tax administrations. The use of the information collected under CRS should be expanded to tackle corruption and money laundering, and information should be shared with relevant competent authorities in other countries. In addition, Transparency International calls for bank account registers with beneficial ownership data that can be directly accessed by competent authorities and for improved exchange of information on cross-border payments.
