Swiss banks are feeling the heat - again - from US authorities. In the latest case, it concerns a corruption saga in Venezuela.

A new specter has come to haunt Swiss banks in the form of Venezuela, according to a report by Bloomberg that quotes unnamed sources and official bodies.

The report said that Switzerland, at the request of US authorities, has agreed to turn over records from at least 18 banks involving Venezuela’s state oil company, Petreleos de Venezuela, which is now the target of a widening corruption investigation by the US Department of Justice, Swiss regulators are quoted as saying.

Among the banks affected, the report said, are UBS, Switzerland’s largest bank, EFG Bank, and CBH Compagnie Helvetique, the report, quoting a “person briefed on the matter.” None of the 18 banks has been accused of wrongdoing, it added.

US authorities’ probes have shown that there has been bribery at PDVSA as well as BANDES, the country’s economic development bank. 

The Swiss bank records are being sought by the US because of a probe into the representatives of Derwick Associates, a Venezuelan energy firm that has done business with PDVSA, the report quoted the Federal Office of Justice in Bern as saying. The DoJ declined to comment, the report said. It quoted Finma, the Swiss regulator, as saying it was aware of the case and had contacted banks about the matter.

This publication has contacted the Federal Office of Justice in Berne; it had not contacted the DoJ at the time of going to press. 

The saga has echoes in other countries. In Malaysia, for example, the state-run investment fund, 1MDB, has been accused of corruption, prompting legal authorities in Switzerland and Singapore to launch investigations. In Brazil, a widening corruption saga has hit BTG Pactual, the bank, prompting it to sell the recently-acquired private bank, BSI, in order to raise capital.

The different stories demonstrate how corruption allegations can affect banks to differing degrees. Another example is in Switzerland itself, where FIFA, the body running football, has seen a raft of high-level resignations, including that of its president, Sepp Blatter, amid claims of corruption. Ironically, given that soccer is not yet a major sport in the US, it was the US Department of Justice that initiated the probe leading to the arrest of FIFA officials in Switzerland.

In recent months the DoJ has signed non-prosecution agreements with scores of Swiss financial institutions, in return for imposing a total of around $1.36 billion in fines, as part of a program through which firms disclose if they had held secret accounts for wealthy US citizens. 

The focus by the US authorities on Swiss banks has led to charges of hypocrisy, with some Swiss industry figures arguing that the US itself remains a prime conduit for questionable financial flows via the state of Delaware, and other locations.