Credit Suisse announces settlement with US authorities related to US dollar payments involving parties subject to US sanctions
Zurich, December 16, 2009 Credit Suisse announces that it has reached a settlement with the New York County District Attorney’s Office, the United States Department of Justice, the Board of Governors of the Federal Reserve System and the Federal Reserve Bank of New York, and the Office of Foreign Assets Control ("OFAC"). The settlement relates to a previously disclosed investigation into US dollar payments during the period 2002 to April 2007 involving parties that are subject to US economic sanctions. As part of the settlement, Credit Suisse has entered into deferred prosecution agreements and an agreement with OFAC and will pay a total of USD 536 million combined.
Credit Suisse had previously disclosed the investigation by US authorities and that it was conducting an internal review into certain US dollar payments involving countries, persons or entities that may be subject to US economic sanctions. In 2005, Credit Suisse decided to exit the business in question and subsequently proactively undertook an extensive independent investigation into the Zurich-based payment activity and other practices, working closely and constructively with regulators and US authorities. Credit Suisse’s internal review has now been concluded and discussed with these and other government authorities including Credit Suisse’s main regulator, the Swiss Financial Market Supervisory Authority, FINMA.
Credit Suisse is committed to the highest standards of integrity and regulatory compliance in all its businesses, and takes this matter extremely seriously. Credit Suisse has enhanced its procedures to prevent practices of this type from occurring in the future. In particular, Credit Suisse:
- Terminated its business with all OFAC-sanctioned parties by 2007, a process largely completed in 2006, including closing its representative office in Tehran;
- Enhanced its global compliance program by, among other things, appointing a global sanctions compliance officer, establishing competency centres and designating individuals responsible for coordinating and monitoring compliance with sanctions programs and enhancing its global policies, procedures and employee training programs, which will continue to be regularly reviewed for effectiveness; and
- Enhanced sanctions filters screening designed to cover incoming and outgoing transactions.
Credit Suisse is gratified that its prompt and substantial assistance and cooperation, and its detailed review and remediation program have been acknowledged by the authorities. As stated in yesterday’s announcement, while Credit Suisse had recorded provisions for this matter through the end of the third quarter of 2009, we expect to record a pre-tax charge of CHF 445 million in the current quarter, which translates to an estimated impact of approximately CHF 360 million after tax.
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- Credit Suisse AG is one of the world's leading financial services providers and is part of the Credit Suisse group of companies (referred to here as 'Credit Suisse'). As an integrated bank, Credit Suisse offers clients its combined expertise in the areas of private banking, investment banking and asset management. Credit Suisse provides advisory services, comprehensive solutions and innovative products to companies, institutional clients and high-net-worth private clients globally, as well as to retail clients in Switzerland. Credit Suisse is headquartered in Zurich and operates in over 50 countries worldwide. The group employs approximately 47,400 people. The registered shares (CSGN) of Credit Suisse's parent company, Credit Suisse Group AG, are listed in Switzerland and, in the form of American Depositary Shares (CS), in New York. Further information about Credit Suisse can be found at www.credit-suisse.com.
Cautionary statement regarding forward-looking information
This press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act. In addition, in the future we, and others on our behalf, may make statements that constitute forward-looking statements. Such forward-looking statements may include, without limitation, statements relating to the following:
– our plans, objectives or goals;
– our future economic performance or prospects;
– the potential effect on our future performance of certain contingencies; and
– assumptions underlying any such statements.
Words such as “believes,” “anticipates,” “expects,” “intends” and “plans” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. We do not intend to update these forward-looking statements except as may be required by applicable securities laws. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that predictions, forecasts, projections and other outcomes described or implied in forward-looking statements will not be achieved. We caution you that a number of important factors could cause results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors include:
– the ability to maintain sufficient liquidity and access capital markets;
– market and interest rate fluctuations;
– the strength of the global economy in general and the strength of the economies of the countries in which we conduct our operations, in particular the risk of a continued US or global economic downturn in 2009 and beyond;
– the direct and indirect impacts of continuing deterioration of subprime and other real estate markets;
– further adverse rating actions by credit rating agencies in respect of structured credit products or other credit-related exposures or of monoline insurers;
– the ability of counterparties to meet their obligations to us;
– the effects of, and changes in, fiscal, monetary, trade and tax policies, and currency fluctuations;
– political and social developments, including war, civil unrest or terrorist activity;
– the possibility of foreign exchange controls, expropriation, nationalization or confiscation of assets in countries in which we conduct our operations;
– operational factors such as systems failure, human error, or the failure to implement procedures properly;
– actions taken by regulators with respect to our business and practices in one or more of the countries in which we conduct our operations;
– the effects of changes in laws, regulations or accounting policies or practices;
– competition in geographic and business areas in which we conduct our operations;
– the ability to retain and recruit qualified personnel;
– the ability to maintain our reputation and promote our brand;
– the ability to increase market share and control expenses;
– technological changes;
– the timely development and acceptance of our new products and services and the perceived overall value of these products and services by users;
– acquisitions, including the ability to integrate acquired businesses successfully, and divestitures, including the ability to sell non-core assets;
– the adverse resolution of litigation and other contingencies;
– the ability to achieve our cost efficiency goals and other cost targets; and
– our success at managing the risks involved in the foregoing.
We caution you that the foregoing list of important factors is not exclusive. When evaluating forward-looking statements, you should carefully consider the foregoing factors and other uncertainties and events, as well as the information set forth in our Form 20-F Item 3 – Key Information – Risk Factors.