Credit Suisse announces settlement with US authorities related to US dollar payments involving parties subject to US sanctions
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.