By Oliver Hirt, John O’Donnell, Stefania Spezzati and Dave Graham
ZURICH/FRANKFURT/LONDON (Reuters) – The United States is pursuing an inquiry into Russian clients that UBS took on when it bought Credit Suisse, three people familiar with the matter said, heightening scrutiny of one of the world’s biggest wealth managers.
The U.S. sanctions enforcement agency, OFAC, has written to the bank as part of this inquiry, two people familiar with the matter told Reuters. A U.S. official, asking not to be named, said the Swiss bank and the enforcer have held discussions.
OFAC, or the Office of Foreign Assets Control, the globe’s most powerful sanctions agency, wrote to UBS in recent weeks, said one of the people.
Spokespeople for UBS and OFAC declined to comment.
The review concerns Russian customers at Credit Suisse that UBS is now overseeing after rescuing the lender, two of the people said. Credit Suisse, UBS’ smaller Swiss peer, imploded in March 2023 following years of scandals from spying to laundering drug money.
UBS is seeking to contain any potential fallout from OFAC’s queries by cordoning off suspect money and decommissioning the accounts to avoid the threat of a penalty, one of those people said.
The U.S. uses sanctions as a foreign policy tool, imposing restrictions to constrain the activities of nations such as Russia and Iran.
Handling Russian money has become increasingly risky, after the U.S. and Western allies rolled out an unprecedented web of sanctions in response to Moscow’s invasion of Ukraine.
While the U.S. official praised UBS for being cooperative, one of the other sources said it was made clear that failure to deal with the problem could be punished.Regulators in Switzerland have been scrutinizing how UBS is handling Credit Suisse clients and the bank’s anti-money laundering policies as they worry the Swiss bank could end up with risky clients, Reuters has reported.
(Reporting by Oliver Hirt, John O’Donnell, Stefania Spezzati and Dave Graham; Editing by Elisa Martinuzzi and Richard Chang)
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