Swiss federal prosecutors have formally filed criminal charges against the failed bank Credit Suisse and its new owner, UBS, over their involvement in the infamous 'tuna bonds' scandal that devastated Mozambique's economy.
Organisational Failures and Money Laundering Allegations
The Swiss attorney general's office announced the charges on Monday, accusing both financial institutions of serious "organisational deficiencies" in their anti-money laundering controls. Prosecutors allege these failures allowed suspicious transactions related to the scandal to go unreported for years.
An unnamed former Credit Suisse employee also faces individual money-laundering charges. The prosecutor's statement highlighted that "considerable defects" existed in the banks' risk management, compliance, and internal directives systems in 2016, which ultimately failed to prevent the alleged wrongdoing.
The $2 Billion Scandal That Crashed an Economy
The case centres on approximately $2 billion (£1.5bn) in loans that Credit Suisse arranged for the Republic of Mozambique between 2013 and 2016. The funds were ostensibly for state development projects, including a maritime security initiative and a national tuna fishery based in the capital, Maputo.
However, a significant portion of the money disappeared. Investigations later revealed that a contractor had arranged secret kickbacks worth at least $137 million, with around $50 million allegedly earmarked for Credit Suisse bankers to secure more favourable loan terms.
The massive fraud led the International Monetary Fund (IMF) and other international donors to suspend financial support for Mozambique, triggering a severe economic crash in the southeast African nation.
Legacy Scandal Haunts UBS Takeover
Credit Suisse had previously settled with US and UK regulators in 2021, paying $275 million to American authorities and £147 million to Britain's Financial Conduct Authority. UBS, which took over its stricken rival in a Swiss government-brokered rescue in March 2023, also settled directly with Mozambique for an undisclosed sum in October 2023.
Despite these settlements, the Swiss criminal case proceeds. UBS has stated it "firmly rejects" the prosecutor's conclusions and will defend itself vigorously. The charges represent another legacy issue for UBS to manage following its emergency acquisition of Credit Suisse for 3 billion Swiss francs.
The Swiss action follows the US Department of Justice's own criminal proceedings, which prompted the banks to finally report the suspicious transactions in 2019. Mozambique had been seeking $1.5 billion in damages for the economic losses suffered.
