Finma fines Coutts in money laundering case

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Swiss market regulator Finma has issued a CHF6.5m (€6.07m) fine to Swiss banking group Coutts & Co in a money laundering case linked to Malaysian sovereign wealth fund 1Malaysia Development Berhad (1MDB).

Finma considered Coutts has seriously breached money laundering regulations by failing to carry out adequate background checks into business relationships and transactions associated with Malaysian sovereign wealth fund 1MDB.

The regulator ordered a disgorgement of CHF6.5m corresponding to “unlawfully generated profits” made by Coutts.

Finma is also to consider opening enforcement proceedings against the bank employees responsible.

Swiss regulator’s investigation has found out that Coutts was involved in the Malaysian sovereign wealth fund scandal since 2003.

“In 2003, some employees of the Singapore branch of Coutts entered into business relationships with individuals associated with what became known as the sovereign wealth fund 1MDB. Coutts, through its branch in Singapore, was the first Swiss bank to accept assets from these individuals.

“When the Coutts employees moved to another bank in Singapore in 2009, some of the business relationships were transferred to Coutts Zurich. In total, 1MDB related assets to the value of $2.4bn were transferred through Coutts accounts in Switzerland,” Finma reported.

A number of high-risk transactions with a total value of $1.7bn were processed from late 2009 to early 2013 through the account of a Malaysian client related to 1MDB.

In 2015, Coutts announced that it was ceasing operations requiring a licence in Switzerland, having transferred a large part of its remaining customer assets to a Geneva-based Union Bancaire Privée.

The process is likely to be concluded by the end of this year.

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