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Credit Suisse was ordered to pay €238M for AML breaches in France

Credit Suisse, agreed to pay €238M on Monday to settle an AML inquiry in France.

It comes after a protracted French investigation into a plan where the lender is charged with violating money laundering regulations by enticing rich clients to Switzerland.


Investigators accused Credit Suisse of pressuring almost 5,000 affluent French clients to open bank accounts in Switzerland, where they would be safe from French tax officials. The claims range in time from 2005 to 2012.


Credit Suisse, which has been involved in a number of crises and legal issues throughout the world, makes no admission of wrongdoing in the settlement that was revealed today.


It is one of the more significant recent accords made under the new French legal framework, which aims to end probes more swiftly and prevent protracted court battles.


The €238 million settlement consists of a €123 million fine and €115 million in unpaid damages and interest.

In a statement, Credit Suisse stated that it was "pleased to resolve this matter."


In advance of a significant reorganization this week, it puts an end to another legal issue that the troubled bank has been dealing with.


In addition, it is the most recent inquiry into Swiss bank accounts that has been concluded in Europe.


Similar accusations were resolved with HSBC by French prosecutors, who are also exploring legal action against UBS.


The subject of the Suisse investigation was the bank's strategy for acquiring approximately 5,000 French customers. The presiding judge stated that the enormous amount of assets under control is €2BN.


The judge also disclosed how officials of Credit Suisse scheduled client meetings "very discreetly, in hotels, in restaurants, and never in official buildings."


According to prosecutors, throughout that time, the bank is believed to have gained €65M in profits from clients who have now satisfied their individual French tax claims through amnesty agreements.


A €123M fine and €115M in state-owed damages and interest payments make up the total amount of the penalties.


Some analysts claimed Credit Suisse could have waited for the outcome of a separate legal dispute involving UBS, but they claimed the deal was proof the bank was desperate to reach a resolution.


Because of the numerous top-level management changes over the past few years, discussions with the French government had become more challenging.


In the meanwhile, Credit Suisse resolved a comparable tax dispute in Italy in 2016 and a Dutch investigation is still open.


In order to settle allegations that it had enticed French clients to its Swiss bank, HSBC agreed to pay €300 million in 2017. This was the first settlement in France utilizing the new legal structure, which is comparable to several US legal arrangements in that it permits parties to avoid a guilty plea in return for immediate sanctions. 


In preparation for a significant makeover that will be unveiled by Suisse on Thursday, led by CEO Ulrich Körner and COO Francesca McDonagh, the lender was eager to resolve as much litigation as possible.


According to a source close to Credit Suisse, "We are trying to reduce the litigation docket."


Last Monday, Credit Suisse and US authorities struck a $495 million settlement over a case involving mortgage bonds from the time of the global crisis.

By fLEXI tEAM

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