Dec 17, 2009 (DVB), A Swiss banking giant has been fined $US536 million after being found guilty of violating US sanctions through years of undetected transactions with so-called "rogue" regimes, such as Burma.
US prosecutors alleged that Credit Suisse, Switzerland's largest bank, had carried out thousands of secret transactions with Iran, Sudan, Libya, and Cuba, as well as Burma. These were done through US banks to avoid detection.
The bank's falsifying of the records of New York-based financial institutions allowed the five countries, all of which are subject to tough US economic blockades, "to access the US financial system in violation of US sanctions", Manhattan district attorney Robert M. Morgenthau said.
A statement released by US attorney general Eric Holder accused the bank of "massive financial misconduct" that was "astounding, in both its scope and complexity".
"For more than a decade, Credit Suisse did business with and for countries that the United States had specifically banned from our financial systems," he said. "But rather than adhere to the law and decline to serve these customers, Credit Suisse established a business model to allow these rogue players access to US dollars."
According to attorney reports, between 2002 and 2006 the bank processed over $US700 million in payments that violated sanctions, although it is unclear what proportion of these related to Burma.
In the case of Iran, Holder said that the company had developed a pamphlet for Iranian clients "explaining how to fill out payment messages so as not to trigger US filters". The majority of the transactions exposed in the court case involved Iran.
The bank told Reuters on Tuesday, prior to the verdict, 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".
The US treasury department in a statement yesterday strongly condemned the apparent "awareness of the conduct within the bank".
Marc Dosch, press officer at Credit Suisse's Zurich headquarters, told DVB today that "there have been clear mistakes; that is why we got in to this situation".
"What has been done is very negative and we agree with the requirements set upon us and we have taken measures, to improve our systems and are capable of complying with sanctions."
US sanctions on Burma have been in place in various forms since 1997, and were extended in August following the guilty verdict handed to opposition leader Aung San Suu Kyi.
Despite recently announcing a policy of dialogue with the ruling junta, Washington has said that sanctions will remain in place until tangible signs of progress toward democratic reform are evident.
The US does however maintain a strong, but highly controversial, business presence in Burma through oil company Chevron (formerly Unocal), which operates the Yadana gas field.
The sanctions that were implemented on Burma in 1997 demanded a halt on new investment in the country, and did not force the withdrawal of companies that had existed there prior to 1997.
Advocacy group EarthRights International estimated in September that Chevron, along with French oil giant Total, which also operates the Yadana gas field, had contributed around $US5 billion to the Burmese junta, much of which had been siphoned into private Singaporean banks.
Reporting by Francis Wade