ZURICH (Reuters) – Swiss bank Julius Baer (BAER.S) has been reprimanded by the country’s watchdog for ignoring money laundering risks in handling millions of francs of suspect payments linked to corruption in Venezuela and world soccer body FIFA.
In a highly critical report, FINMA said there had been scores of failings at Switzerland’s third-largest bank, such as when it accepted a 70 million Swiss franc ($71 million) transfer for a Venezuelan customer in 2014 despite knowing he was accused of corruption.
The regulator’s announcement, which outlined serious lapses as recently as 2018, comes as Switzerland seeks to change its image as one of the globe’s most opaque and secretive financial centres.
FINMA told Julius Baer to improve its controls and appointed an auditor to oversee the group. Nonetheless, it did not make use of its power to demand the return of profits linked to the wrongdoing, meaning the bank faces no financial penalty.
The supervisor said it had uncovered systematic failings and management inaction on money-laundering risks, saying the vast majority of the more than 150 sample transactions it had taken showed irregularities between 2009 and early 2018.
Julius Baer acknowledged the lapses.
“We accept FINMA’s findings and regret the shortcomings identified in our business with Latin American clients,” said Chairman Romeo Lacher. “This is not compatible with the risk culture that we are striving to achieve.”
The bank’s shares were down 2.7% by 0920 GMT.