Credit Suisse Cuts Ties With Some Venezuelan Wealth Clients
07 Jan 2021

Credit Suisse Group AG has cut relationships with a number of Venezuela’s wealthy as it weighs the risk of doing business with politically-exposed clients in the sanctions-hit country.

Switzerland’s second-largest lender has cut assets it manages for the nation’s wealthy by more than half over the past few years, to about $2 billion, according to people familiar with the matter. The bank joins UBS Group AG, which last year closed certain accounts with links to Nicolas Maduro’s government or to Petroleos de Venezuela SA, the state-owned oil company.

A spokesperson for Credit Suisse declined to comment.

Banks are increasing compliance efforts after paying billions of dollars over the past years for violating sanctions or running afoul of anti-money laundering laws. Venezuela has become a particular concern after the Trump administration escalated measures against the country’s oil industry in an effort to encourage regime change. Switzerland and other European countries have also imposed sanctions on Venezuelan officials.

Swiss regulator Finma last year asked UBS and Credit Suisse to describe how they run their Latin American operations, Bloomberg reported previously. Finma has extended its dialog with the banks over the course of last year to include compliance controls and processes in other emerging markets as well as working with third-party money-managers, people familiar with the discussions said. Once its assessment is done, the regulator will likely come back to the respective lenders with findings and possible recommendations, the people said.

Officials for Finma and UBS declined to comment.

Latin America is a fertile ground for offshore wealth managers, with many of the region’s wealthy families looking for ways to protect their assets from economic and political uncertainty. Credit Suisse had about 75 billion francs ($85.6 billion) under management in the region in late 2019, according to a presentation at the time.

By Patrick Winters and Marion Halftermeyer, Bloomberg, 6 January 2021

Read more at Bloomberg

RiskScreen: Eliminating Financial Crime with Smart Technology

You can claim CPD minutes for this content, by signing up to our CPD Wallet

FREE CPD Wallet