Introduction
Switzerland’s Office of the Attorney General (OAG) has escalated the long-running Mozambique loan scandal by filing a criminal indictment against a former Credit Suisse employee and the bank itself for alleged money laundering. The charges center on the bank’s failure to prevent the offense due to organizational deficiencies, implicating both the defunct Credit Suisse and its successor, UBS, in a case that underscores persistent compliance failures in the Swiss banking sector.
Key Points
- The indictment centers on Credit Suisse's failure to report a suspicious transaction to Swiss anti-money laundering authorities when it terminated a relationship involving Mozambican state loans.
- UBS, as the successor to Credit Suisse, is now implicated in the case due to the alleged organizational failures of its acquired entity.
- This is one of the first major legal actions by Swiss authorities targeting systemic compliance failures at a bank, rather than just individual employees.
The Core of the Indictment: A Failure to Report
The indictment filed by the Office of the Attorney General of Switzerland focuses on a specific sequence of events involving loans to Mozambican state-owned companies. According to the OAG, the alleged money laundering offense is connected to the termination of a commercial relationship by Credit Suisse SA (CS). The central allegation is that this termination resulted in the transfer abroad of funds believed to be of criminal origin. Crucially, neither CS nor its parent company, Credit Suisse Group SA, reported this transaction as suspicious to the Money Laundering Reporting Office Switzerland (MROS), as required by Swiss law.
This failure to file a suspicious activity report is a key pillar of the case. The MROS serves as Switzerland’s financial intelligence unit, and reporting to it is a fundamental obligation for banks under the country’s anti-money laundering (AML) framework. The OAG’s move suggests prosecutors believe the bank had sufficient grounds for suspicion but neglected its legal duty, allowing the funds to move unchecked.
Organizational Deficiencies Implicate the Bank and UBS
Beyond the actions of an individual, the indictment makes a more systemic accusation. The OAG alleges that Credit Suisse SA and the Credit Suisse Group—and by extension, their successor companies UBS SA and the UBS Group SA—”failed to prevent the offence as a result of organisational deficiencies.” This language targets the bank’s internal controls and compliance culture, suggesting the alleged money laundering was enabled by a flawed system, not just a rogue employee.
This aspect of the case directly drags UBS into the legal fray. As the entity that absorbed Credit Suisse in 2023, UBS now inherits the legacy liabilities of its former rival. The OAG’s explicit naming of “successor companies UBS SA and the UBS Group SA” in the indictment confirms that the legal and reputational risks from this scandal have formally transferred to Switzerland’s remaining banking titan. It represents a significant post-merger headache for UBS management, which is already tasked with integrating the two complex institutions.
A Narrowed Focus: One Employee Charged, Another Cleared
The legal action has a dual outcome for individuals involved. The OAG has proceeded with an indictment against one employee of the former Credit Suisse on a charge of money laundering. However, in a concurrent decision, the OAG announced it has abandoned its criminal proceedings against another employee of the former CS. This indicates a prosecutorial focus on specific conduct and responsibility, rather than a broad net cast over all personnel involved in the Mozambique loan transactions.
The decision to drop proceedings against one individual while charging another and the corporate entities suggests the OAG is building a case that distinguishes between personal criminal liability and corporate failure. The charge against the employee pertains directly to money laundering, while the allegations against Credit Suisse and UBS concern a failure of prevention mechanisms. This two-pronged approach allows Swiss authorities to pursue both individual accountability and institutional reform.
Broader Implications for Swiss Banking Compliance
This indictment marks a notable moment in Swiss financial enforcement. While regulators have previously fined banks for control failures, a criminal indictment by the Attorney General that cites “organisational deficiencies” elevates the matter. It signals a willingness to treat systemic compliance breakdowns as a prosecutable offense, not merely a regulatory shortcoming. The case against Credit Suisse and UBS could set a precedent for how Swiss authorities handle future institutional failures in money laundering prevention.
The shadow of the Mozambique “tuna bond” scandal, which involved over $2 billion in loans and led to sovereign default and corruption charges in multiple jurisdictions, has long hung over Credit Suisse. This Swiss indictment shows that the legal repercussions are far from over. For UBS, the challenge is now twofold: managing the direct legal case and demonstrating to markets and regulators that it has decisively strengthened the control frameworks it inherited, ensuring such organizational deficiencies are not replicated in the combined entity.
📎 Related coverage from: admin.ch