Swiss to wind down MBaer private bank after US money-laundering accusation

SWITZERLAND'S financial regulator FINMA said on Friday it would wind down MBaer Merchant Bank AG after Washington threatened to cut the private bank’s access to the US financial system for money-laundering violations and breaching sanctions against Iran and Russia.

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The US Treasury Department had alleged that Zurich-based MBaer and its employees facilitated corruption linked to Russian money laundering, as well as money laundering and terrorist financing on behalf of Iran's Islamic Revolutionary Guard Corps and its Quds Force, which are under sanctions from the United States.

FINMA said in a statement the bank lacked adequate anti money laundering controls, allowing clients to evade asset freezes. A regulatory investigation found that 80 percent of MBaer’s business relationships carried heightened risks, and 98 percent of incoming assets came from high risk clients.

The bank repeatedly ignored its compliance department's recommendations, systematically failed to investigate the background of its business relationships and transactions, did not always fulfil its anti-money-laundering obligations and, in several cases, executed transactions on behalf of clients who were on sanctions lists, FINMA said.

'Disproportionately high risks'