FINMA concluded that Julius Baer had for several years failed to adequately verify the origin of assets belonging to clients linked to two Russian politically exposed persons and had violated anti-money-laundering rules.
Under the regulator’s decision, the bank must maintain an additional $300 million in capital until it completes the divestment of risky clients’ assets. In addition, FINMA will confiscate about $12 million in profit Julius Baer earned from this business, and enhanced supervision over the bank will remain in place until 2032.
The proceedings concerned not only the bank’s Russian ties, but also the write-off of $700 million in loans to the bankrupt Austrian group Signa of René Benko. These were the episodes FINMA included in the review it has now completed.
This is not the first time Julius Baer’s operations with Russian clients have drawn the attention of regulators. FINMA previously examined the bank’s relationship with an unnamed Russian banker who was under investigation on suspicion of embezzlement.
Materials from the High Court of England as far back as 2013 described Julius Baer’s transactions with the former owner of the Lithuanian bank Snoras, Vladimir Antonov. According to Snoras, in 2009–2011 securities worth 280 million euros were transferred to Antonov’s accounts at Julius Baer.
In the autumn, the Monaco regulator AMSF also raised concerns about Julius Baer over insufficient oversight of client transactions. One of the bank’s clients was Viktor Fedotov, the former owner of Transneft contractor VNIIST, and The Guardian wrote that an offshore company linked to him bought a Bombardier private jet for $34 million.
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