Switzerland’s Finance Ministry Fined Ex-Credit Suisse Risk Head For Tuna Bond Scandal

The Swiss Federal Department of Finance has penalized a former executive of Credit Suisse for not reporting suspicious activities to Swiss anti-money laundering authorities.

Lara Warner, former Head of Risk & Compliance, was fined 100,000 Swiss francs ($114,000) for allegedly failing to warn the Money Laundering Reporting Office in Switzerland (MROS) of a suspicious 2016 transaction involving Mozambique’s finance ministry worth 7.9 million francs.

The Federal Department of Finance (FDF) didn’t mention her name explicitly but filed a criminal order against an executive whose roles and responsibilities are directly hinting towards Warner,  stated media sources.

Warner, a New Yorker and former executive in the Investment Banking Division, was the Head of Risk & Compliance at Credit Suisse from 2015 to 2021. As per Swiss authorities, she either overlooked suspicious transactions involving money laundering or allowed it to continue.

The Mozambique Tuna Bond scandal was one of numerous humiliating cases for Credit Suisse, which led to the Swiss Financial Market Supervisory Authority (FINMA) releasing its report in October 2021.

According to the report, Credit Suisse’s London unit negotiated loans involving one billion dollars to two government-owned companies in Mozambique in the year 2013, which were apparently meant to fund coast guard ships and a tuna fishing fleet in the destitute East African state.

As per media sources, Warner now is contesting the penalty and believes the accusations will be dropped in court.

What is the Mozambique Tuna Bonds Scandal?

In the tuna bonds scandal, also referred to as the tuna bond affair or the hidden debt scandal, it is alleged that Iskandar Safa, the owner of Privinvest, paid more than $100 million in bribes to Mozambican officials and Credit Suisse employees Andrew Pearse, Surjan Singh, and Detelina Subeva in exchange for contracts and loans to expand Mozambique’s fishing industry and enhance maritime security.

The loans were apparently for a project that involved tuna fishing and marine security. However, large amounts of the loans, which were supported by unreported official guarantees, disappeared.

Later details revealed that the loans were arranged in Special Purpose Vehicles to evade the International Monetary Fund’s (IMF) non-concessional borrowing constraints on Mozambique since the IMF prohibits low-income countries such as Mozambique from taking out high-interest or non-concessional loans to prevent unsustainable debt.

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This recent penalty marks a significant moment in the legal inquiry into the Mozambique tuna bonds scandal, with Lara Warner, a former senior executive at Credit Suisse, held personally responsible for failing to report suspicious activity to the Swiss anti-money laundering authorities.

According to a statement by Warner’s attorney, it was not Ms. Warner who declined to file a money laundering report.

After the bankruptcy, Credit Suisse was acquired by its rival United Bank of Switzerland UBS (UBS Group)

The bank later reached an out-of-court settlement in the Mozambique case.