Switzerland’s financial regulator has begun enforcement proceedings against three banks over their provisions to prevent money laundering following an investigation into a graft scandal at Brazilian state-owned oil firm Petrobras.
The watchdog, FINMA, did not name the three banks, where enforcement actions were initiated in September, and said it would comment neither on how long the process will take nor what penalties the Swiss banks face.
“The regulator determined shortcomings in the implementation of money-laundering regulations that will now be investigated by an enforcement action,” FINMA said in a statement on Tuesday, adding that details would be announced after the cases were resolved.
Swiss authorities have been collaborating with Brazil since at least March on the investigation into corruption at Petroleo Brasileiro SA, or Petrobras, that has grown to include Latin America’s largest engineering and construction company, Odebrecht SA, and engulfed the country in a political crisis.
Swiss Attorney General Michael Lauber said in March that prosecutors had uncovered around 300 accounts at more than 30 Swiss banks suspected to be linked to a massive corruption and money-laundering scandal. Switzerland froze roughly $400 million and returned $120 million to Brazil.
Early last month, Swiss authorities gave Brazilian prosecutors records of accounts held by Eduardo Cunha, the speaker of Brazil’s lower house of Congress, and his family in Switzerland. Assets worth $2.4 million were frozen. Cunha had said he had no foreign bank accounts and has not commented further.
A FINMA spokesman said on Tuesday that banks in Switzerland had been scrutinised to gauge whether they had done enough to prevent money laundering.
The regulator said its review placed particular importance on whether banks had fulfilled their due-diligence provisions of Switzerland’s money washing regulations and how they made reports to the country’s money laundering office.
In enforcement actions, FINMA can order banks to change their business model or key personnel, disgorge profits, ban managers from the industry and revoke licences. If it discovers potential criminal wrongdoing, the regulator also can file a complaint with authorities.
While some banks were determined to have met regulatory obligations, FINMA said, others where “smaller shortcomings” were uncovered are now being subjected to intensified reviews, to ensure measures they’ve introduced to remedy problems are working.
In addition to the three banks now facing enforcement proceedings, FINMA said reviews of other banks have yet to be completed, an indication that more actions could be launched.