Businesshala News Exclusive | Lawmakers Launch Probe of Credit Suisse Compliance With Russia Sanctions

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House Oversight Committee seeks documents related to deal to reduce exposure to yacht, aircraft loans

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They are seeking the information following reports that Credit Suisse instructed investors in a recent debt deal to destroy and erase information related to its dealings with rich clients.

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The debt deal, first reported by the Financial Times in February, reduced some of the bank’s exposure to $2 billion loans it made to wealthy clients to finance yachts and jets. The FT reported that a presentation for the deal said there were four loan defaults in the 2017-2018 period because of US sanctions against Russian oligarchs. It later reported investors had been asked to destroy deal documents.

“This report raises significant concerns about Credit Suisse’s compliance with the severe sanctions imposed by the United States and its allies and partners on the architects and enablers of Russia’s brutal and unprovoked invasion of Ukraine, including Russian President Vladimir Putin and oligarchs in his inner circle,” The committee chairs wrote.

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A Credit Suisse decreased to comment on the letter and pointed to the bank’s earlier comments on the deal and sanctions. On March 3 the bank said it had asked investors who hadn’t ended up participating in the deal to destroy documents, citing market practice, and that it had nothing to do with recent sanctions. It said no data was erased within Credit Suisse.

The lawmakers said they were particularly concerned that the instruction to destroy documents coincided with Switzerland saying it would join other countries in applying sanctions. There were also questions about whether investors in the deals had adequate information to comply with sanctions if any of the loans had been made to sanctioned people.

Earlier this month, Mr. Gottstein said Credit Suisse follows all US, UK and European Union sanctions as binding, and that Switzerland applying them Feb. 28 was “almost irrelevant.”

Credit Suisse has acknowledged freezing $5 billion in client assets in 2018 to comply with earlier sanctions imposed over Russia’s aggression in Ukraine. It disclosed up to $1.1 billion in exposure to Russia earlier this month and said exposure to sanctioned individuals was minimal.

The committee wants to review a list of the investors in the deal, as well as documents pertaining to Credit Suisse’s due diligence on the deal and its underlying assets in relation to sanctions. The committee requested all communications and documents relating to any instructions to destroy the deal-related information, as reported by the FT. The lawmakers are also seeking any bank communications with the owners of the underlying assets.

In the letter, the committee asked Credit Suisse for documents dating back to Jan. 1, 2017, by April 11.

Write to Margot Patrick at [email protected]

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Credit: www.Businesshala.com /

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