The Swiss watchdog for financial crime has slammed Julius Baer for ignoring red flags in numerous transactions involving millions of francs.
FINMA has published a dismal report highlighting "scores of failings" at the bank - which has a base in Guernsey.
One such example was an instance when Julius Baer accepted a 70 million franc transfer from a South American customer in 2014, despite that person having been accused of corruption. Another was a money laundering risk linked to FIFA.
The publication of the report came with a general announcement from Switzerland: it is trying to change its image as an "opaque and secretive" financial centre. Many would argue Guernsey has a similar image, which needs to change, although local bosses would say the island follows every international rule out there, and is even ahead of the curve in some areas. Unlike Switzerland, for example, Guernsey has a private beneficial ownership register - it is not public though, and only law enforcement and other authorities can see it.
Overall, FINMA told Julius Baer that it had found "systematic failings and management inaction" on money laundering risks. The bank needed to improve its controls, and had an independent auditor appointed to oversee activity.
None of the profits made through the transactions were made to be returned though, and no financial penalty was levelled at Julius Baer.
A spokesperson for the business on an international level said: "We accept FINMA’s findings and regret the shortcomings identified in our business with Latin American clients,” said Chairman Romeo Lacher. “This is not compatible with the risk culture that we are striving to achieve.”
Because of the report, the bank’s shares were down 2.7% mid afternoon yesterday.
Pictured top: Julius Baer.
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