US Lawmakers Launch Investigation Of Credit Suisse’s Compliance With Russian Sanctions

US lawmakers are investigating reports that Credit Suisse tried to destroy evidence concerning a secured loan deal secured by yachts and jets belonging to Russian oligarchs to see if these dealings violated US sanctions after reports that the bank asked clients to destroy documents related to the deal aroused suspicion.

According to WSJ, Reps. Carolyn Maloney, chairwoman of the Committee on Oversight and Reform, and Rep. Stephen Lynch, chairman of the Subcommittee on National Security, sent a letter to Credit Suisse CEO Thomas Gottstein asking the bank to hand over information on its financing of yachts and aircraft that may have been owned by Russian citizens on the US sanctions list.

They’re looking into the offering to see if the bank instructed clients to destroy materials related to the deal in an effort to cover its tracks.

The offering, which was first reported last month, reportedly helped CS to reduce some of its exposure to some $2 billion in loans it made to help Russian oligarchs finance the purchase of their yachts and jets.

“This report raises significant concerns about Credit Suisse’s compliance with the severe sanctions imposed by United States and its allies and partners on the architects and enablers of Russia’s brutal and unprovoked invasion of Ukraine, including Russian President Vladimir Putin and oligarchs in his inner circle,” the committee chairs wrote.

According to WSJ, the committee wants to review a list of the investors in the deal, as well as Credit Suisse’s due diligence and its underlying assets in relation to sanctions. The committee requested all communications and documents relating to any instructions to destroy information related to the deal. Lawmakers also are seeking any bank communications with the owners of the underlying assets.

The letter was sent on Monday. Just before WSJ broke the news, Reuters reported that Credit Suisse had drawn up plans to stop pursuing new business in Russia – a report that was interestingly timed, to be sure.

According to the document, Credit Suisse has been striving to reduce its business contacts with Russia, helping clients limit their own exposure to the country and transferring employees to other locations. The bank confirmed roughly 4% of assets under management in its wealth management unit belonged to Russian clients. CS has said it has frozen $5 billion in client assets in 2018 to comply with earlier sanctions imposed over Russia’s aggression in Ukraine. It disclosed up to $1.1 billion in exposure to Russia earlier this month and said exposure to sanctioned individuals was minimal.

A spokesperson for CS said earlier this month that the bank’s request that clients destroy documents related to the deal was in keeping with standard market practices, and definitely wasn’t an attempt to cover up violations of US sanctions.