Compliance Corner: Switzerland Punishes Banque Audi (Suisse) Over AML Failings

Editorial Staff 26 March 2024

Compliance Corner: Switzerland Punishes Banque Audi (Suisse) Over AML Failings

The latest compliance news: regulatory developments, punishments, guidance, permissions, new product and service offerings.

FINMA, Banque Audi (Suisse) SA
Lebanon’s Audi banking group has been punished for anti-money laundering failings at its Swiss business.

The Swiss Financial Market Supervisory Authority, aka FINMA, said yesterday that Banque Audi (Suisse) SA “breached its obligations in the prevention of money laundering and thereby seriously violated financial market law.”

The watchdog said that during enforcement proceedings, Banque Audi (Suisse) SA “took measures to restore compliance with the law.”

FINMA also ordered the bank to disgorge SFr3.9 million ($4.33 million) of profits and imposed a SFr19 million surcharge.

During an on-site inspection in 2021, FINMA reviewed the client relationships with politically exposed persons from several countries. In doing so, it discovered serious shortcomings in the prevention of money laundering. This prompted FINMA to open enforcement proceedings in 2022, which it has now concluded, the regulator said in its statement. 

“As part of the on-site inspection, FINMA by default obtained all internal audit reports. In a specific report, the bank’s internal auditors had pointed out shortcomings in the prevention of money laundering with regard to certain relationships and demanded that measures be taken. However, this specific report was initially not mentioned to FINMA and was not submitted to it,” it said. 

FINMA said it also found that the bank had inadequately clarified the origin of assets in high-risk client relationships. 

For example, a payment from a politically exposed person was made into the account of a high-ranked Lebanese official. This amount was subsequently forwarded. Although the bank was unable to clarify the purpose of these transactions, it refrained from reporting them to the Money Laundering Reporting Office, FINMA said.

“In other cases of client relationships with politically exposed persons from other countries, there were press articles referring to the possibly unlawfully acquired assets of these persons. The bank did not sufficiently investigate these suspicions and was unable to dispel them. In doing so, the bank was in serious violation of anti-money laundering regulations,” it said. 

The regulator said Banque Audi (Suisse) SA also took corrective measures. In particular, it replaced people in several key positions and increased resources in compliance. 

In March 2022, Bank Audi shut more than 30 accounts belonging to UK nationals or their close relatives since a London court ordered it to transfer funds stuck in the crisis-hit banking sector to a UK client, a depositors' union said (source: Reuters, 4 March 2022). 

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