Reuters: Swiss bank UBS faces US sanctions inquiry over Russian clients

November 13, 2024

By Ukraine

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The United States is pursuing an inquiry into Russian clients that UBS took on when it bought Credit Suisse, three people familiar with the matter told Reuters, which heightens scrutiny of one of the world’s biggest wealth managers.

In response to Moscow’s 2022 full-scale invasion of Ukraine, Western nations imposed severe sanctions on Russia, including its financial sector, banning major banks from SWIFT and freezing assets. Russia has attempted sanctions evasion through partnerships and alternative payment systems, but Western allies continue to target these efforts to curb its financial and military capacities.

The US sanctions enforcement agency, OFAC, has reportedly written to UBS as part of this inquiry. An anonymous US official confirmed that the Swiss bank and the enforcer have held discussions.

Reuters reports that the review involves Russian clients of Credit Suisse, now managed by UBS after its acquisition of the troubled lender. Credit Suisse, UBS’s smaller Swiss counterpart, collapsed in March 2023 following years of scandals.

UBS is reportedly working to limit potential repercussions from OFAC’s inquiry by isolating suspect funds and closing problematic accounts to avoid penalties. While a US official acknowledged UBS’s cooperation, Reuters noted that UBS was also cautioned that inadequate action on these accounts could lead to punitive measures.

Regulators in Switzerland have also been scrutinizing how UBS is handling Credit Suisse clients and the bank’s anti-money laundering policies, worried the Swiss bank could end up with risky clients, according to previous Reuters reporting.

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