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GENEVA —
\nSwitzerland\u2019s financial market authority has penalized Julius Baer bank for violating its obligations to fight money laundering over a nearly nine-year span.<\/p>\n
\nThe sanctions are related to alleged corruption linked to Venezuela\u2019s state-owned oil company and global soccer body FIFA.<\/p>\n
\nThe authority, known as FINMA, cited Julius Baer for a \u201cserious infringement of financial market law\u201d and barred it from carrying out \u201clarge and complex acquisitions until it once again fully complies with the law.\u201d <\/p>\n
\nThe bank was also ordered to revamp its hiring and management of client advisers, and adjust its remuneration and disciplinary procedures.<\/p>\n
\n\u201cFINMA has instructed Julius Baer to undertake effective measures to comply with its legal obligations in combating money laundering and rapidly finalise the measures it has already started putting in place,\u201d the authority wrote in announcing the closure of the probe of the bank. \u201cThe Board of Directors must also give greater attention to its AML (anti-money laundering) responsibilities.\u201d<\/p>\n
\nThe Zurich-based bank, which had 426 million Swiss francs (dollars) of assets under management at the end of 2019, said it \u201ctakes note\u201d of the decision. The bank said it cooperated \u201cextensively\u201d with the authority, and that \u201cthe identified deficiencies have been addressed.\u201d <\/p>\n
\nThe authority\u2019s investigators unearthed \u201csystematic failings\u201d in the application of Swiss anti-money laundering law, turning up irregularities in \u201calmost all of the 70 business relationships\u201d that were selected due to their risk. The \u201cvast majority\u201d of over 150 transactions examined also showed irregularities, FINMA said. <\/p>\n
\nJulius Baer didn\u2019t do enough to determine clients\u2019 identities, provide information about the source of their wealth, or monitor transactions properly. One adviser handling Venezuelan clients in 2016 and 2017 reaped millions in bonuses and other payouts even though the bank had spotted possible wrongdoing in connection with a case involving state oil giant PDVSA.<\/p>\n
\n\u201cThe bank\u2019s remuneration system focused almost exclusively on financial targets and paid scant regard to compliance and risk management goals,\u201d FINMA said.<\/p>\n
\n\u201cAs an example, a CHF 70 million (about $70 million) transaction was carried out in respect of a large Venezuelan client in 2014 without the required investigations, even though the bank had learnt in the same year that the client was facing accusations of corruption,\u201d it added.<\/p>\n
\nFINMA said it was appointing an independent auditor to monitor internal reforms.<\/p>\n
\n\u201cUntil it is once again fully compliant with the law, the bank is prohibited from conducting transactions such as major acquisitions that lead to a significant increase in operating risks (including but not limited to money laundering risk) or in its organisational complexity,\u201d it said. <\/p>\n
\nThe authority has been involved in crackdowns on a number of corruption and money-laundering cases in recent years, also including Brazilian oil giant Petrobras and Malaysian sovereign wealth fund 1MDB. It did not offer details about alleged corruption or money laundering involving Julius Baer at FIFA, the Zurich-based world soccer body.<\/p>\n<\/div>\n
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