The Federal Department of Finance (EFD) fined UBS for failing to report suspected money laundering. The long-standing cases all revolve around the former president of Yemen.
The number of unreported cases to the Financial Department is alarmingly high. Internally, UBS recorded 5,438 warning notices in connection with its relationships with former Yemeni President Ali Abdullah Saleh and his family. However, the bank did not forward these warnings to the Money Laundering Reporting Office Switzerland (MROS).
Saleh ruled Yemen for over three decades and faced international criticism for corruption. At UBS, he was classified as a PEP, or politically exposed person. As a rule, relationships with such clients should be clarified extra carefully.The relationship dates back to 2004. Not only Saleh and his two wives but also a total of 25 people related to Saleh had customer relationships with UBS.
The EFD’s penalty notice from April 4 mentions a case from 2009. At that time, Saleh’s son personally submitted a check from the Sultan of Oman for 10 million dollars in Zurich. An internal bank note is cited: It is generally known that wealthy rulers in the Arab world support their poorer colleagues with such gifts. According to the EFD, this was a flimsy excuse, and the bank should have raised the alarm.
In 2011, amid the turmoil of the Arab Spring, the bank reviewed the business relationship, which resulted in the aforementioned 5,438 warning notices. Subsequently, almost all of the Saleh family’s accounts were closed, but no MROS report was made.
UBS also failed in the handling, as this allowed very large sums of money, presumably associated with corrupt practices by Ali Abdullah Saleh, to be withdrawn from state control.
The responsible individuals could not be identified due to only partially or incompletely submitted documents. As a result, the penalty was automatically lower. The department also noted that UBS has since improved its risk management.
Saleh lost power in Yemen in 2012 and was killed by Houthi fighters in 2017.
