Credit Suisse risks sanctions for loan agreements in Mozambique
ZURICH (AP) – Credit Suisse has announced settlements totaling nearly $ 700 million with authorities in the UK and the United States (United States) for loans to Mozambican state-owned companies which Swiss regulators say violated anti-money laundering rules.
The Swiss financial markets authority has also asked the Zurich bank, Switzerland’s second largest bank, to improve its risk controls.
Credit Suisse said on Tuesday evening that its U.S. settlement was for some $ 275 million. The bank said it would pay a $ 200 million penalty under a deal with Britain and write off $ 200 million in loans to the southern African nation. He said he expects to take a charge of $ 230 million in the third quarter related to the settlements, which are related to operations between 2013 and 2016.
The British subsidiaries of the bank arranged in 2013 two loans guaranteed by the Mozambican government for a total amount of $ 1 billion – or nearly 6% of the country’s economic output – to state-owned companies ProIndicus and Empresa Mocambiana de Atum (EMATUM), said the Swiss authority. The loans were primarily intended to be used to pay for maritime security vessels and a tuna fleet, he said.
Several people in the African country, including former government officials, have been accused of corruption, embezzlement and money laundering related to loans. U.S. prosecutors have also indicted five people, including former Credit Suisse bankers Andrew Pearse, Surjan Singh and Detelina Subeva, in the $ 2 billion fraud involving fictitious naval, fishing and other projects in Mozambique.
Swiss financial market authority FINMA said Credit Suisse violated its obligation to file a “suspicious activity report” in the case and failed to properly account for the risks associated with certain transactions lending with governments. “There are high reputational risks associated with large loans to financially weak or corrupt countries,” said FINMA. “Credit Suisse seriously violated the organizational requirements and reporting obligations (anti-money laundering law) regarding the loans it made to state-owned companies in Mozambique in 2013.”