Jimu News Reporter Zhang Yang
On February 20, 2022, the British " Guardian " published a secret article about one of the world's largest private banks - Credit Suisse (later referred to as Credit Suisse ), aiming to disclose how Credit Suisse opens or maintains bank accounts for high-risk customers involved in drug trafficking, money laundering, corruption and other serious crimes around the world, involving more than 100 billion Swiss francs (approximately 688.1 billion yuan). The
article points out that despite decades of commitment to clear suspicious customers and illegal funds, the leaked data shows that Credit Suisse has failed in customer background checks, and many customers with criminal records are still its customers.
Credit Suisse customer data was leaked
Credit Suisse manages assets of more than 1.6 trillion Swiss francs. It was founded in 1956 and is one of the largest banks in Switzerland , second only to Swiss bank . The bank is headquartered in Zurich and has nearly 50,000 employees worldwide. However, among the 3,500 "account managers" responsible for finding and serving wealthy customers around the world, many do not strictly abide by relevant systems and regulations.
Several months ago, a whistleblower leaked more than 18,000 Credit Suisse bank account information to "South Deutsche ", which claimed Credit Suisse's bank confidentiality law was "immoral." This information is associated with more than 30,000 Credit Suisse customers, which is just part of the data of the bank's 1.5 million private banking customers.
leaked data include personal, shared and corporate bank accounts, which hold an average of CHF 7.5 million. Nearly 200 accounts in the data are worth more than 100 million Swiss francs, and more than a dozen accounts are worth billions.
Credit Suisse
This includes dictators of Philippines , former Hong Kong Stock Exchange chairman who was sentenced to jail for taking bribes, traffickers who organized pornographic performances, and corrupt politicians from Egypt to Ukraine.
data also shows that an account owned by Vatican was used to spend 350 million euros to make suspected fraudulent investments in London real estate. Several defendants, including Cardinal , are being investigated for the investment.
leaked a large number of bank data to an anonymous whistleblower of the São Deutsches. "I think the Swiss bank confidentiality law is immoral. The so-called protection of financial privacy is just an excuse. It is Swiss banks covering up their fig leaf as a collaborator for illegal acts."
Most problematic accounts are still active
00 urged Credit Suisse data breach, including reporters from more than 48 media partners around the world, including The Guardian, The South Deutsches, Le Monde, Miami Herald and New York Times , conducted a global news investigation that lasted for more than a month.
In a project jointly conducted by the São Deutsche and the Organized Crime and Corruption Reporting Project (OCCRP), they spent several months using the data to investigate the bank. They found evidence of torture, drug trafficking, money laundering, corruption and other serious crimes from Credit Suisse account clients, indicating that the bank has a very serious lack of background investigations.
Problem accounts globally
Credit Suisse said in a statement: "Credit Suisse strongly opposes these allegations and inferences." The statement believes that the problem found by the reporter is based on "selective information taken out of context, resulting in a false explanation of the tendency of banking business."
The bank also stated that a large part of these allegations have been relatively long and are historical problems.
The Guardian article pointed out that although some accounts in the data were indeed opened as early as the 1940s, more than two-thirds of the accounts were active after 2000, and some of them are still in use recently.
Credit Suisse background checks are ineffective
Like all other banks in the world, Credit Suisse claims it has strict control mechanisms to conduct extensive background checks on its customers to “ensure compliance with the highest standards of conduct.”
A report leaked by Swiss financial regulators in 2017 gave some explanations on the bank's internal procedures at the time. The report said that customers will face stricter scrutiny if they are labeled as politicians from high-risk countries or those involved in high-risk activities such as gambling, arms trading, financial services or mining. Account managers will use a variety of resources to verify customers and their risk levels, including the Thomson Reuters platform called , a data platform widely used in the financial services industry to mark when people are arrested, prosecuted, investigated or convicted of serious crimes.
background checks are not only suitable for new customers, banks also need to constantly reevaluate existing customers. Credit Suisse screens customers at least once every three years, and for customers with the highest risk, it will be screened every year. Credit Suisse's lawyers told the Guardian that these regular reviews were introduced "more than 15 years ago", meaning it has been conducting background checks on existing clients since the beginning of 2000.
According to the leaked data, the information of many criminals in the case was clearly recorded on the Thomson Reuters World-Check platform, which shows that the background investigation claimed by Credit Suisse is useless.
More than one of the criminals are Credit Suisse customers
One of the most notorious cases in Credit Suisse’s history is involving the dictator Ferdinand Marcos and his wife Imelda . It is estimated that the couple sucked up to $10 billion from the Philippines during their three terms as president of Ferdinand .
Ferdinand Marcos and his wife Imelda
Credit Suisse helped them open multiple Swiss accounts under the pseudonym "William Sanders" and "Jane Ryan". In 1995, a Zurich court ordered Credit Suisse and another bank to return $500 million of the stolen funds to the Philippines.
leaked data shows that a lawyer who helped Ferdinand launder money was convicted in 1992. Despite this, she opened a Credit Suisse account in 2000 and later held about CHF 8 million.
Li Fuzhao , as the former chairman of the Hong Kong Stock Exchange, is one of the wealthiest people in Hong Kong, known as the "Godfather of the Stock Market", and died in 2014. In 1990, he was convicted of accepting bribes in exchange for a company listed on the stock exchange. However, according to leaked data, he was still able to open a Credit Suisse account that later held CHF 59 million, ten years later.
"Godfather of the Stock Market" Li Fuzhao
Credit Suisse's German client Seidel was found guilty of bribery in 2008. Seidel is an employee of Siemens , and as the head of the multinational company in Nigeria , he fought for lucrative contracts for his employer by sending cash to Nigerian politicians.
After German authorities raided Siemens' headquarters in Munich in 2006, Seidel admitted his role in the bribery program. According to leaked Credit Suisse data, his account has been active for at least the past decade. After he left Siemens, one of his accounts had CHF 54 million. Seidel's lawyers refused to explain the source of the huge sum. Siemens also said it knew nothing about the money.
In some cases, Credit Suisse does freeze the accounts of certain problem customers. However, how long does the bank take to close it, the time difference issue remains controversial.
A Swedish named Seedholm, who opened an account on Credit Suisse in 2008. His crimes in the Philippines were exposed in 2009 and were convicted of human trafficking in 2011. His Credit Suisse account was not closed until 2013 when he was unable to provide background check materials on his own.
Credits News has been in constant scandal in recent years
When Credit Suisse's gorgeous headquarters was built in Zurich in the 1870s, its design was designed to symbolize "Switzerland as a financial center."
And in recent decades, Credit Suisse's reputation has been falling. Faces at least a dozen penalties and sanctions for tax evasion, money laundering, intentional violations of regulations and fraudulent acts against their clients. Overall, it has accumulated more than $4.2 billion in fines.
The bank reported its fourth quarter of 2021 loss of CHF 1.6 billion, partly because it has allocated more than CHF 400 million to deal with multiple "litigation charges" against it.
Credit Swiss Headquarters Building
On the 17th of last month, after violating the COVID-19 epidemic regulations twice, its chairman Antonio Holta-Osorio resigned. He was originally a "fire-fighter" found by Credit Suisse and took office in April 2021. There were also rumors of cheating in marriage.
, and he was originally expected to lead the team to rectify the corporate culture of the investment banking giant, Credit Suisse, and control investment risks. Previously, the collapse of a British financial company called Greensill and the liquidation of a US hedge fund called Archegos caused heavy losses to Credit Suisse, with a preliminary estimate of about 350 million pounds.
On February 7 this year, the Swiss court began to hear a criminal lawsuit initiated by the procuratorate against Credit Suisse. The prosecution accused the second largest bank of Switzerland of failure to take necessary measures to prevent employees from assisting foreign drug trafficking gangs to conceal and launder the stolen money.
Swiss banking industry Secretary law
As early as 1713, Swiss banks had already established a trustworthy reputation, when the Geneva Grand Parliament banned bankers from revealing details about the wealth deposited by European aristocrats. Switzerland soon became a tax haven for many wealthy people in the world, and its bankers maintained an "absolutely silent obligation" to their client affairs.
In 1934, with the introduction of the Swiss Bank Secrecy Law, this custom became a formal regulation. The law stipulates that it is a crime to disclose customer bank information to foreign authorities. In the following decades, wealthy people from all over the world flocked to Swiss banks.
In the past, foreign regulators and tax authorities were frustrated by the inability to penetrate the Swiss financial system, but this changed in 2007. At the time, Swiss banker Bradley Beaconfield volunteered to provide information to U.S. authorities on how the bank helped thousands of wealthy Americans evade taxes through secret accounts.
This disclosure of the financial industry in Switzerland has caused shocks, and the United States forces Switzerland to unilaterally disclose which taxpayers have secret Swiss accounts since 2014. In the same year, Switzerland reluctantly signed the International Convention on the Automatic Exchange of Banking Information .
Swiss franc
Starting in 2018, Switzerland actually agreed that its banks will exchange information about their clients with foreign tax authorities in the future by adopting the so-called general reporting standard (CRS).
Swiss banking often adds to the global exchange system as a turning point. Swiss Bankers Association told the Guardian: "Swiss banking customers no longer need to keep confidential for overseas customers. We are transparent and there is nothing to hide in Switzerland."
However, Switzerland's nearly 90-year-old banking secrets law is still in effect and has been strengthened recently. It is said that Tax Justice Network estimates that due to Switzerland, countries around the world lose at least about $21 billion in tax revenue each year, many of which are developing countries .
Some experts pointed out, "This situation has fueled corruption and made developing countries lack urgently needed tax funds for development."
Where does Credit Suisse and Swiss banking go from
The lawyer Jeff Neiman, the lawyer of the Credit Suisse data breach, believes that the number of scandals involving the bank indicates that there are deeper problems.
Nemann claims that banks in Switzerland have a corporate culture, "encouraging bank employees to ignore them from the top, not look at them, work hard, and actively assist customers in circumventing any possible laws to best protect and manage their assets."
But Credit Suisse strongly opposes such allegations. Its lawyers said Credit Suisse has fully cooperated with many of the investigations proposed by the Guardian and announced that it would put "risk management at the heart of the bank."
The bank said its "preliminary review" of accounts marked by secret reporting items has been completed, and more than 90% of the reviewed accounts are now closed or are "closed before receiving media inquiries." The remaining accounts remained active, and the bank said it would “take appropriate background review and other control-related actions”.
Credit Suisse's statement added: "These media allegations are intended to discredit the bank and the Swiss financial market."
However, the impact of this leak may be much more than a Credit Suisse bank, which may threaten the credibility of the entire Swiss banking industry. It is reported that thanks to the bank confidentiality law, Swiss financial institutions manage approximately 7.9 trillion Swiss francs (about 54.3 trillion yuan), with nearly half of which belong to foreign customers.
The Guardian pointed out at the end, "Although I know that bank confidentiality law is very effective in the success of the Swiss economy, I insist that a wealthy country like Switzerland should be worthy of its conscience."
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