Credit Suisse and UBS reportedly face an investigation by US authorities for Russian sanctions evasion

American prosecutors are set to investigate the services provided by banks to clients with connections to the Kremlin.

Credit Suisse and UBS are reportedly being investigated by US authorities over suspicions that they may have helped Russian oligarchs evade sanctions.

The banks are among several lenders that have received subpoenas from the US Department of Justice (DoJ), as part of an investigation into whether financiers aided oligarchs with links to the Kremlin in evading sanctions, and how these clients were vetted.

Both Credit Suisse and UBS have declined to comment on the matter, and a spokesperson for the DoJ was not immediately available for comment. The investigation poses a new challenge for UBS, which is currently scrutinizing Credit Suisse’s troubled divisions, including the investment banking arm, following the latter’s recent $3 billion (£2.5 billion) merger as it struggled with client withdrawals and a loss of investor confidence.

The sale marked the first bailout of a global bank since the 2008 financial crisis.

Due to a series of disappointing financial results and controversies, including links to the failed supply chain finance firm Greensill and the revelation that the bank had hired private detectives to follow former employees, Credit Suisse had been experiencing a downward trend in its stock price.

Despite having a history of offering banking services to Russia’s wealthy class, with the bank having overseen as much as $60 billion for Russian clients at its peak, resulting in annual revenues of hundreds of millions of dollars, it has been struggling to maintain profitability.

According to reports, Credit Suisse ceased its business with Russian clients in May last year, around three months after the start of the Ukraine war.

At the time, the bank held around $33 billion for Russian individuals, which was 50% more than UBS, as reported by Bloomberg. The recent subpoenas issued by the US Department of Justice (DoJ) are part of the new “KleptoCapture” task force’s efforts to combat kleptocracy and target wealthy associates of Russian President Vladimir Putin.

US investigators have already seized assets belonging to these oligarchs, and President Joe Biden has issued a warning, stating that the US, along with its European allies, will take action to locate and seize their “ill-gotten gains,” including yachts, luxury apartments, and private jets.

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