Swiss watchdog chides three banks over Tunisia accounts: TV

Mon Oct 21, 2013 8:29am EDT
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ZURICH (Reuters) - Switzerland's financial watchdog has told HSBC and two other private banks to pay thousands of Swiss francs for failing to supervise properly the accounts of people close to ousted Tunisian President Zine al-Abidine Ben Ali, television reported.

The report on RTS television late on Sunday said the Financial Market Supervisory Authority (FINMA) faulted the way HSBC Private Bank (HSBA.L: Quote), Union Bancaire Privee (UBP) and EFG Bank (EFGN.S: Quote) handled money of confidants of Ben Ali, who fled in 2011 after popular protests ended his 23-year rule.

The case is another black mark for Swiss banks - the world's largest managers of offshore wealth - that are trying to shed their image as accomplices for strongmen and tax cheats.

Under Swiss rules, banks have to pay particular attention to people in high office, known as politically exposed persons (PEPs), when they open accounts. The rules, which also cover family members and associates of such people, are aimed at avoiding money laundering or other crimes.

FINMA declined comment on the RTS report, other than to refer to a 2011 statement that it had opened enforcement proceedings in four cases linked to due diligence of people involved in the Arab Spring uprisings.

Most of the 20 Swiss banks it checked after Switzerland froze accounts of people connected to revolts in Tunisia, Egypt and Libya had handled cases of such politically exposed persons adequately, it had said at the time.

RTS said FINMA in April charged HSBC 88,000 Swiss francs ($97,600) for costs, installed an external auditor and banned it from opening accounts for PEPs for three years.

An HSBC spokesman declined to address the specific points the report raised. He released a statement saying the few cases cited by the regulator had happened a number of years ago.

"We have taken strong corrective measures since, which were welcomed by the regulator. The bank has strict requirements and monitoring controls in place that regulate entering into and maintaining client relationships," it added.   Continued...

The logo of HSBC bank is seen at its office in the Canary Wharf business district of London April 1, 2013. REUTERS/Chris Helgren