US lawmakers asked Credit Suisse CS -2.52%
Group AG to provide information on compliance of the bank with sanctions due to the Russian invasion of Ukraine.
In a letter to Credit Suisse Chief Executive Thomas Gottstein, Monday, Rep. Carolyn B. Maloney (D., NY), Chair of the Committee on Oversight and Reform, and Rep. Stephen F. Lynch (D., Mass.) , chairman of the subcommittee on national security, asked the bank to share information about its financing of yachts and planes owned by potentially sanctioned individuals.
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 deals with wealthy clients.
The debt deal, first reported by the Financial Times in February, reduced some of the bank’s exposure to $2 billion in loans it made to wealthy customers to finance yachts and jets. The FT reported that a presentation for the deal said there had been four loan defaults in 2017-2018 due to US sanctions against Russian oligarchs. It was later reported that investors had been asked to destroy business records.
“This report raises serious concerns that Credit Suisse is complying 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 the Russian President Vladimir Putin and oligarchs in his inner circle,” wrote the committee chairs.
A Credit Suisse spokesman said he could not comment immediately. The bank said on March 3 it had urged investors who were not involved in the transaction to destroy documents, citing market practice and saying it had nothing to do with recent sanctions. No data was deleted within Credit Suisse, it said.
Lawmakers were particularly concerned that the order to destroy documents coincided with Switzerland’s announcement that it would join other countries in imposing sanctions. There were also questions about whether investors in the deals had sufficient information to comply with sanctions if any of the loans had been made to sanctioned individuals.
Earlier this month, Mr Gottstein said that Credit Suisse considers all US, UK and European Union sanctions to be binding and that Switzerland’s application of the sanctions on February 28 was “almost irrelevant”.
Credit Suisse has admitted to freezing $5 billion in client funds in 2018 to comply with previous sanctions imposed over Russia’s aggression in Ukraine. It announced up to $1.1 billion in exposure to Russia earlier this month and said exposure to sanctioned individuals was minimal.
The committee would like to review a list of investors in the deal and documents related to Credit Suisse’s due diligence on the deal and the underlying assets for sanctions. The committee requested all notices and documents related to instructions to destroy the deal-related information, as reported by the FT. Lawmakers also seek any bank communication with the owners of the underlying assets.
In it, the committee asked Credit Suisse to submit documents from January 1, 2017 by April 11.
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https://www.wsj.com/articles/lawmakers-launch-probe-of-credit-suisse-compliance-with-russia-sanctions-11648475239?mod=rss_markets_main Lawmakers are launching an investigation into Credit Suisse’s compliance with Russia sanctions