Swiss to wind down private bank MBaer that US accused of money laundering
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The US Treasury had threatened to cut the Swiss private bank’s access to the US financial system for breaching sanctions against Iran, Russia and Venezuela.
PHOTO: REUTERS
- Swiss regulator FINMA ordered MBaer Merchant Bank's liquidation after Washington threatened access to the US system for breaching sanctions.
- FINMA found MBaer lacked adequate anti-money laundering measures and enabled clients to circumvent official asset freezes.
- The regulator deemed the case "extremely serious," exposing the bank and Swiss financial centre to disproportionately high risks.
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BERN - Switzerland’s financial regulator FINMA said on Feb 27 it would wind down MBaer Merchant Bank after Washington threatened to cut the private bank’s access to the US financial system for breaching sanctions against Iran and Russia.
The US Treasury Department had alleged that Zurich-based MBaer and its employees had facilitated corruption linked to Russian money laundering, as well as money laundering and terrorist financing on behalf of Iran’s Islamic Revolutionary Guard Corps and its Quds Force, which are sanctioned by the US.
FINMA said in a statement the bank lacked adequate anti-money-laundering controls, allowing clients to evade asset freezes.
A regulatory investigation found that 80 per cent of MBaer’s business relationships carried heightened risks, and 98 per cent of incoming assets came from high-risk clients.
The bank repeatedly ignored its compliance department’s recommendations, systematically failed to investigate the background of its business relationships and transactions, did not always fulfil its anti-money laundering obligations, and, in several cases, executed transactions on behalf of clients who were on sanctions lists, FINMA said.
“The case is extremely serious,” the regulator said.
“Through its conduct and inadequate organisation, (the bank) exposed itself and the Swiss financial centre to disproportionately high risks.”
FINMA said MBaer had almost 700 clients and more than 60 employees, and held client assets totalling 4.9 billion Swiss francs (S$8 billion) at the end of 2025.
Board of directors resign
MBaer said in a statement on Feb 27 it is now in liquidation and represented solely by the appointed liquidators, Mr Daniel Staehelin and Mr Lukas Bopp of law firm Kellerhals Carrard Basel KlG.
The board of directors has resigned, the bank added.
The bank said it had sufficient assets to satisfy all clients and creditors in full. However, after the US intervention and the revocation of its licence, transaction restrictions mean it can currently make payments only in Swiss francs and up to 100,000 francs per client.
FINMA said it had started enforcement proceedings against MBaer in 2024. These proceedings ended three weeks ago, but due to an MBaer appeal - which the bank withdrew on Feb 27 - FINMA had been unable to implement the wind-down plans.
A raft of international sanctions have been imposed on Russia since its invasion of Ukraine, and Iran has been heavily sanctioned by the US for years.
US Treasury Secretary Scott Bessent said on Feb 26 that banks should be “on notice” that the Treasury will use the “full force of our authorities” to protect the integrity of the US financial system. REUTERS
