Bank one of several under investigation over ties to former central bank governor Riad Salameh
A Swiss financial regulator has found that a subsidiary of one of Lebanon’s largest banks, which has been investigated over its ties to Lebanon’s former central bank governor Riad Salameh, did not do enough to prevent money laundering.
Banque Audi (Suisse) SA, a subsidiary of Bank Audi Group, one of the largest banking groups in Lebanon, “breached its obligations in the prevention of money laundering” and “seriously violated financial market law”, Swiss financial regulator Finma said in a statement on Monday.
The bank is one of several suspected of sheltering hundreds of millions of dollars allegedly embezzled from the Lebanese economy by Mr Salameh, who is being investigated in Lebanon and at least five European countries. France and Germany have issued arrest warrants for him as part of their investigations, while the US and the UK have imposed sanctions on him for “abusing his position of power”.
Monday’s findings conclude a 2022 enforcement proceeding initiated by Finma that was launched after an on-site inspection in 2021 uncovered significant deficiencies in the bank’s anti-money laundering measures.
“Finma carried out investigations at over a dozen banks and opened enforcement proceedings in two cases in the Lebanon context,” Finma spokeswoman Patrizia Bickel told media in an email. “The proceeding against Banque Audi, which has now been concluded, is one of them.”
Finma claimed the bank had not adequately “clarified the origin of assets in high-risk client” and failed to report suspicious transactions to the Money Laundering Reporting Office in Switzerland.
“In doing so, the bank was in serious violation of anti-money laundering regulations,” the agency said in a statement.
In the Banque Audi case, Finma has ordered the confiscation of profits of 3.9 million Swiss francs ($4.3 million) and a capital surcharge of 19 million francs.
“In the course of the proceedings, the bank has co-operated with Finma and took measures to restore compliance with the law,” the regulator said in a statement.
The bank did not respond to media’s request for comment.
Finma said it reviewed Banque Audi’s relationships with politically exposed people from various countries, but declined to comment on those involved.
In some cases, “there were press articles referring to the possibly unlawfully acquired assets of these persons”, the agency simply said in the statement.
In 2022, seven Swiss and Lebanese groups lodged a complaint to Finma requesting an investigation into several banks tied to Mr Salameh. The banks in question included Banque Audi.
The groups allege that Bank Audi, Zurich-based Julius Baer, and BankMed Suisse, the Swiss subsidiary of another Lebanese bank, helped the embattled former bank governor to shelter millions of dollars in embezzled funds.
Mr Salameh is alleged to have embezzled more than $330 million from Lebanon’s central bank through a contract awarded in 2002 to Forry Associates Ltd, his brother’s company.
Judicial documents show a significant portion of the money allegedly diverted from the central bank was transferred to banking institutions in Switzerland to finance the acquisition of luxury properties in Europe.
The Swiss public prosecutor, which has opened an investigation into Mr Salameh over allegations of money laundering, is looking into Banque Audi for its involvement in a suspicious transfer of $153 million in treasury bonds by Mr Salameh.
“The Finma measures are definitely related to our complaint,” Zena Wakim, a lawyer and president of Swiss foundation Accountability Now.
United Arab Emirates Dirham Exchange Rate
