The Swiss Federal Prosecutor’s office has reignited a complex legal battle by appealing the November 2024 acquittal of Credit Suisse, now part of UBS, in a high-profile money laundering scandal tied to a Bulgarian cocaine trafficking network. At the core of the case are allegations that Credit Suisse, between 2004 and 2008, failed to implement sufficient anti-money laundering (AML) controls, allowing illicit proceeds to flow through its accounts largely undetected. The appeal, filed with the Swiss Supreme Court in March 2025, seeks to set aside the lower court’s decision and reinstate the original conviction, raising profound questions about successor liability in banking mergers.

Background of the Original Conviction and Acquittal

Credit Suisse was first convicted by the Federal Criminal Court in June 2022, marking the first criminal conviction of a major Swiss bank for money laundering. Prosecutors argued that the bank’s transaction monitoring systems were inadequate, due diligence procedures were inconsistently applied, and suspicious activity reports were not filed promptly. A CHF 2 million fine was imposed, alongside orders to strengthen compliance measures.

Five months later, in November 2024, the same court acquitted Credit Suisse. Judges concluded that while the bank’s AML framework had shortcomings, the prosecution had not proven beyond reasonable doubt that Credit Suisse managers willfully ignored red flags or that the deficiencies directly facilitated laundering. That reversal prompted the current appeal.

The Appeal and UBS’s Role

The Attorney General’s office formally petitioned to nullify the acquittal in January 2025 and lodged the appeal with the Supreme Court in March. Key points in the appeal include:

• The lower court’s interpretation of Swiss AML statutes
• The assessment and weight given to evidentiary documents
• The legal standard applied to corporate intent

UBS, which acquired Credit Suisse in 2023, has filed its own appeal on successor liability, arguing that:

• A merged entity should not inherit criminal liability for pre-merger misconduct
• UBS directors did not participate in Credit Suisse’s historical operations
• Post-merger compliance upgrades mitigate inherited risks

Swiss Anti-Money Laundering Legal Framework

Switzerland’s AML regime is governed by two principal statutes:

• The Federal Act on Combating Money Laundering and Terrorist Financing (AMLA), which requires financial intermediaries to:
  • Identify and verify the beneficial owners of accounts
  • Monitor transactions for unusual patterns indicative of criminal proceeds
  • File suspicious activity reports with the Money Laundering Reporting Office Switzerland (MROS)
  • Maintain comprehensive records for audits and investigations
• The Federal Act on Banks and Savings Banks, notably Article 47, which:
  • Protects client confidentiality under banking secrecy
  • Permits disclosure of client data for criminal investigations and AML enforcement

This framework balances client privacy with the need for transparency in combating financial crime.

Detailed Chronology of Events

• Between 2004 and 2008, Credit Suisse serviced accounts linked to a Bulgarian drug ring with frequent high-volume cash deposits and transfers to high-risk jurisdictions
• In 2011, Swiss regulators conducted AML reviews and recommended upgrades to Credit Suisse’s transaction monitoring systems and staff training
• By 2017, the Money Laundering Reporting Office Switzerland opened a formal inquiry, gathering compliance reports, emails, and transaction logs
• In June 2022, the Federal Criminal Court convicted Credit Suisse and imposed a CHF 2 million fine
• In November 2024, the same court acquitted the bank, ruling insufficient proof of intent
• In March 2025, the Federal Prosecutor appealed to the Swiss Supreme Court; UBS filed its own appeal on merger-related liability

Precedent and International Comparisons

This case is often compared to major AML enforcement actions abroad:

• In the United States, banks like HSBC and Standard Chartered entered into deferred prosecution agreements and paid multi-billion-dollar fines under the Bank Secrecy Act
• In the United Kingdom, the Money Laundering Regulations 2017 impose criminal penalties on firms that fail to maintain adequate AML controls

The outcome in Switzerland may align the country more closely with aggressive enforcement seen elsewhere or reaffirm its traditionally higher evidentiary standards.

Analysis of Successor Liability in Banking Mergers

Key legal questions before the Supreme Court include:

• Whether UBS explicitly assumed responsibility for Credit Suisse’s past operations in the merger agreement
• If criminal intent can be attributed to UBS directors for pre-merger misconduct
• The impact of post-merger compliance enhancements on inherited liability

Scholars predict a possible compromise allowing successor liability only when merger contracts include specific indemnities or when the acquiring bank continues business without substantive change.

Reactions from Industry and Compliance Experts

Industry observers have noted:

• A former Swiss regulator: “This appeal is critical. It will determine whether banks can ever ‘clean the slate’ through mergers.”
• A corporate law academic: “Swiss courts may balance legal certainty with deterrence of financial crime, creating a novel jurisprudence.”

UBS has stated its commitment to “world-class compliance standards” and ongoing investment in advanced monitoring technologies.

Potential Outcomes and Implications

The Supreme Court may:

• Uphold the acquittal, reinforcing high evidentiary thresholds and limiting successor liability
• Reinstate the conviction, expanding AML enforcement and preventing banks from avoiding historical liability via mergers
• Issue a nuanced ruling, partially reinstating the verdict while clarifying liability boundaries

Banks will likely tighten merger agreements, include explicit indemnities, and conduct deeper pre-merger compliance audits to mitigate risks.

Conclusion: A Precedent-Setting Moment for Swiss Banking

The Swiss Supreme Court’s ruling will clarify successor liability in financial crime prosecutions and influence global AML enforcement. For UBS and Credit Suisse, the decision holds significant financial and reputational stakes. For the banking industry, it underscores the indispensable role of rigorous compliance and due diligence.

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Related Links

• Appeal Announcement by Reuters
• Initial Conviction Coverage by SwissInfo
• Swiss Banking Act Overview on Wikipedia
• Analysis by Barron’s

Other FinCrime Central News About the UBS – Credit Suisse Saga

• UBS’s Financial Reporting Challenges and AML Concerns After Credit Suisse Merger
• UBS Acquitted in Credit Suisse Money Laundering Case
• UBS fails in its attempt to halt the appeal process concerning money-laundering charges

Source: Reuters