With the takeover of Credit Suisse, UBS also acquired some clients that did not meet its risk or reputation standards. Now, the US authority responsible for sanctions is said to have inquired with the major Swiss bank about Russian clients.
The «Office of Foreign Assets Control» (OFAC) is said to have contacted UBS and asked questions about Russian clients. This was reported by the news agency «Reuters», citing several anonymous sources. Neither the authority nor the major bank wanted to comment on the report.
This is also said to involve clients of the former Credit Suisse. No distinction is made as to whether this refers to individuals, companies or organizations that are included on the various sanctions lists or not. While the lists of Switzerland and the EU are congruent, there are differences to those of the UK and the U.S.
An OFAC employee, who did not wish to be named, confirmed contacts with the bank and praised the cooperation with UBS, the report continues.
Not the First Investigations
In recent years, there have been repeated reports of investigations by US authorities in connection with possible sanctions violations by the two major Swiss banks.
In the past, the Russian market played a more important role at Credit Suisse than at UBS. At times, CS managed funds from Russian clients amounting to 60 billion Swiss francs. Following the Russian invasion of Ukraine in February 2022, this sum fell to around half.
UBS Risk Management Principles
Following the takeover of CS, UBS announced its intention to review certain client relationships. This concerned various areas and not just Russian clients or those associated with sanctions. UBS has pointed out on various occasions that it has a fundamentally more conservative risk profile and a lower risk appetite than CS.
UBS has also announced that it intends to anchor its risk management principles and corporate culture in the «entire combined organization». This also includes the fact that business relationships from CS times can be terminated.
Sanction Measures by Switzerland
In Switzerland, around 2,250 natural persons, companies and organizations are currently on the sanctions list in connection with the situation in Ukraine. Switzerland last adopted the 14th sanctions package of the European Union (EU) in mid-October.
According to the State Secretariat for Economic Affairs State Secretariat for Economic Affairs (SECO), the assets blocked in Switzerland in connection with the sanctions against Russia amounted to 5.8 billion francs at the end of 2023, which is around 1.7 billion francs less than in the previous year.
Violations of sanctions can lead to severe penalties in the U.S.. French bank BNP Paribas, for example, had to pay almost $9 billion in 2014 due to sanction violations in connection with business with Sudan, Iran and Cuba.
