Swiss Regulator Probes Panama Alongside 1MDB, Petrobrasby and
Finma investigating `suspicious' Panama Papers connections
Brazil, Malaysia cases involve `billions,' Branson says
Switzerland’s financial regulator will investigate “suspicious” bank connections that have surfaced in leaked Panama documents and is stepping up probes into a troubled Malaysian development fund and Petroleo Brasileiro SA.
“The leaked database from Panama is just the latest proof of how money flows like water through multiple jurisdictions, sometimes for legitimate purposes, sometimes not,” Finma director Mark Branson said at a news conference in Bern on Thursday.
A series of reports this week based on millions of documents leaked from the Panama law firm Mossack Fonseca revealed how its lawyers, including a Geneva team, worked with Credit Suisse Group AG, UBS Group AG and other big banks to create numerous offshore shell companies for world leaders, athletes and other rich clients.
Finma will investigate the “suspicious” Swiss bank connections, Branson said, noting that this represents considerable work because of the sheer volume of information. The regulator had said on Monday it would “clarify” the extent to which Swiss banks may have used the services of Mossack Fonseca to determine if they broke any domestic banking rules.
UBS said it ended its relationship with Mossack Fonseca in 2010. Credit Suisse Chief Executive Officer Tidjane Thiam said in an interview this week that his bank doesn’t engage in tax avoidance and only accepts offshore structures if they serve a legitimate purpose.
Two other international probes into alleged corruption have intensified in recent weeks. Finma is pursuing three enforcement cases against financial institutions in the Petrobras affair and four proceedings tied to allegations of bribery at 1Malaysia Development Bhd., Branson said.
“There is concrete evidence that the risk management and measures taken to fight money laundering were not sufficient,” Branson said. 1MDB directors offered to resign Thursday after a parliamentary committee probe found poor oversight of the fund.
Brazilian politicians are trying to impeach the country’s president Dilma Rousseff over allegations her campaign received illegal donations from a kickback scheme at state-run Petrobras. A quarter of Swiss banks questioned in connection with Petrobras may have violated rules to prevent money laundering, he said.
“The extent of the cases and the sums involved are vast,” in the Brazilian and Malaysian cases,” Branson said. “We are talking about cash flows amounting to several billion U.S. dollars, with individual transactions running into hundreds of millions.”