The Swiss banking system has been considered a benchmark for stability, reliability and the highest standards of confidentiality for decades. The combination of these factors has made the country one of the centers of international private banking. However, in recent years, Swiss banks have increasingly found themselves at the center of international inspections and investigations related to possible violations of sanctions, insufficient financial monitoring and assistance to risky clients in hiding assets and even money laundering.
The interest in the Swiss banking system from sanctioned regimes and high-risk clients is explained by several factors. First, it is a historically strong culture of banking secrecy. For decades, it has been a key competitive advantage of Swiss financial institutions. Second, a significant part of banks specializes in private capital management, which involves the use of complex financial instruments – trusts, investment funds and multi-level corporate structures. These mechanisms are often used to hide the real ultimate beneficiaries. After the start of Russia’s full-scale war against Ukraine, the attention of international regulators to the movement of Russian capital has increased significantly, due to the fact that many sanctioned Russians and those associated with them began to withdraw their fortunes here.
Financial supervisors are increasingly drawing attention to the fact that the compliance control systems of some Swiss banks do not always keep up with the new requirements of global financial regulation or deliberately do not comply with them. Compliance involves thorough verification of clients, establishing the origin of funds and identifying the ultimate beneficiaries. However, in a number of cases that have become the subject of journalistic and regulatory investigations, it turned out that banks relied on incomplete or outdated customer data. This created opportunities for the use of bank accounts in schemes to hide assets or launder money. Moreover, often the internal financial monitoring of Swiss banks deliberately missed questionable transactions or did not verify the legality and transparency of the funds involved.
US and UK regulators have repeatedly stressed in their assessments that financial institutions that work with international capital should apply much stricter control procedures. According to representatives of financial supervisors, some banks may not have reacted quickly enough to changes in sanctions regimes or to new information about high-risk clients. In such conditions, even formally legal transactions can arouse suspicion if they are associated with complex ownership structures or jurisdictions known for low transparency.
One of the illustrative examples was the case of the Swiss banking group EFG International. In March 2024, the US Office of Foreign Assets Control (OFAC) ordered the bank to pay $3.74 million to the US Treasury Department for 873 established cases of violation of sanctions restrictions. The investigation revealed that EFG carried out transactions in the interests of sanctioned persons from among Russian citizens through the use of so-called omnibus accounts, where the ultimate beneficiaries were hidden from American correspondent banks.
In October 2025, the American regulator fined the EFG Capital division $650,000 for its failure to establish a system for monitoring suspicious transfers. It was found that the bank “missed” checking more than 900 transactions worth $305 million, many of which concerned jurisdictions with a high risk of money laundering.
In February 2026, Luxembourg law enforcement authorities had already conducted searches at its subsidiary EFG Bank Luxembourg on suspicion of money laundering, again in the interests of Russian sanctioned individuals.
Another reputational blow for the Swiss banking sector was the case of MBaer Merchant Bank. The Swiss Financial Market Supervisory Authority (FINMA) found that the bank had not taken adequate measures to combat money laundering. The bank was threatened with sanctions from the US Treasury Department, which included a ban on access to the US banking system and the right to make payments in US dollars. At the end of February 2026, the Swiss authorities revoked the license and launched the procedure for the liquidation of the bank. It is noteworthy that this decision was made the very next day after the US Financial Crimes Enforcement Network (FinCEN) accused MBaer Merchant Bank of money laundering and violating sanctions against Russia, Venezuela and the US, providing irrefutable evidence of dubious financial transactions.
Another high-profile case was the scandal surrounding UBS and Credit Suisse (which was absorbed by UBS in 2023). An investigation by European and American regulators found that Credit Suisse continued to service accounts of sanctioned Russians after 2014 and even 2022. The bank’s compliance officers, who were supposed to prevent this, helped hide the true owners of the assets through a system of offshore structures. Credit Suisse managed Russian assets worth more than $60 billion, which brought the financial institution up to $600 million in income annually.
Experts note that the key problem lies not only in individual cases of possible violations, but also in the structural features of Swiss banking. The traditional model, built on confidentiality and a high level of trust in the client, in the conditions of the modern financial system increasingly comes into conflict with the requirements of transparency. That is why international organizations involved in the fight against money laundering are calling on Swiss banks to strengthen customer due diligence and cooperate more actively with foreign regulators.
In addition, the globalization of financial flows makes it difficult to track the real owners of assets. Complex corporate structures, offshore companies and nominee owners allow hiding the ultimate beneficiaries of funds. In such conditions, even minor gaps in the bank’s internal procedures can create opportunities for abuse.
The current wave of inspections and investigations demonstrates that the international financial system is increasingly tolerant of such risks. Regulators are seeking not only to establish the facts of possible violations, but also to force banks to radically reconsider their approaches to compliance. In response, financial institutions are forced to invest significant resources in transaction monitoring technologies, automated analysis of financial flows and deeper customer verification.
The situation surrounding Swiss banks has become a kind of test for the entire system of international financial supervision. If its banks can quickly adapt to new standards of transparency and apply a more responsible compliance approach, their reputation can be restored. Otherwise, Switzerland risks significant image losses and will be constantly under the close supervision of European and American regulators.