Swiss to wind down private bank MBaer that US accused of money laundering

Washington had threatened to cut the Swiss private bank’s access to the US financial system. Read more at straitstimes.com.

BERN - Switzerland’s financial regulator FINMA said on Feb 27 it would wind down MBaer Merchant Bank after Washington threatened to cut the private bank’s access to the US financial system for breaching sanctions against Iran and Russia.

The US Treasury Department had alleged that Zurich-based MBaer and its employees had facilitated corruption linked to Russian money laundering, as well as money laundering and terrorist financing on behalf of Iran’s Islamic Revolutionary Guard Corps and its Quds Force, which are sanctioned by the US.

FINMA said in a statement the bank lacked adequate anti-money-laundering controls, allowing clients to evade asset freezes.

A regulatory investigation found that 80 per cent of MBaer’s business relationships carried heightened risks, and 98 per cent of incoming assets came from high-risk clients.

The bank repeatedly ignored its compliance department’s recommendations, systematically failed to investigate the background of its business relationships and transactions, did not always fulfil its anti-money laundering obligations, and, in several cases, executed transactions on behalf of clients who were on sanctions lists, FINMA said.

“The case is extremely serious,” the regulator said.