FCA has fined Credit Suisse (Credit Suisse International, Credit Suisse Securities (Europe) Ltd and Credit Suisse AG) £147,190,276 and agreed with it that it will forgive $200m of debt owed by the Republic of Mozambique as a result of loans and a bond exchange that were tainted by corruption as a result of serious financial crime due diligence failings. FCA found breaches of Principles 2 and 3, and of SYSC 6.1.1R.
FCA found that, between October 2012 and March 2016, Credit Suisse had information from which it should have appreciated there was an unacceptable risk of bribery associated with two Mozambican loans and a bond exchange related to government sponsored projects.
The contractor engaged by Mozambique, a jurisdiction known to have high levels of government official corruption, was known as a “master of kickbacks”, and secretly paid over $50m to members of the Credit Suisse deal team, including two Managing Directors, in order to secure the loans on more favourable terms. The employees deliberately concealed the kickbacks, but FCA said the warning signs of potential corruption should have been clear to Credit Suisse’s control functions and senior committees. It criticised the consistent lack of scrutiny or enquiry in the face of important risk factors and warnings.
FCA took into account the undertaking to forgive $200m of debt and said that, without this, the fine would have been much higher. It also applied a 30% early settlement discount.
The action is part of a global resolution agreement also involving US and Swiss authorities, for around $475m.