Switzerland is once again drawing intense global scrutiny due to a series of scandals involving its banking system. Regulators and law enforcement agencies from several countries, including the United States, are investigating cases in which Swiss banks were allegedly used to store and launder assets belonging to sanctioned individuals — including those linked to Russia and Iran — as well as funds of corrupt origin.
A recent prominent example is the case of the Zurich-based private bank MBaer Merchant Bank AG. In February 2026, the US Treasury proposed cutting the bank off entirely from the dollar financial system over allegations of violating sanctions against Russia and Iran, as well as facilitating money laundering and corruption. According to US authorities, the bank processed hundreds of millions of dollars in transactions on behalf of clients connected to sanctioned entities, including Iran’s Islamic Revolutionary Guard Corps. Swiss regulator FINMA almost immediately announced the forced liquidation of the bank, citing “systematic and extremely serious” violations in the areas of anti-money laundering and sanctions compliance.
This is not an isolated case. In recent months and years, Swiss authorities and international organizations have been registering heightened risks of sanctions evasion, particularly regarding Russian sanctions. FINMA has repeatedly warned of a rise in attempts to circumvent restrictions introduced after 2022. In parallel, investigations are ongoing into other banks, such as Reyl, where weaknesses in due diligence have been identified when dealing with clients from autocratic regimes and figures linked to corruption.
Switzerland has traditionally remained one of the world’s largest financial centers, historically holding significant wealth, including from Russia and countries with high levels of corruption. By various estimates, Swiss banks held hundreds of billions of dollars in Russian assets prior to the imposition of sanctions. Despite the freezing of several billion francs (the latest figures put frozen Russian assets at over CHF 8 billion), critics — including activists such as Bill Browder — argue that the system still lacks sufficient transparency and effectiveness in combating “dirty” money.
In response to this pressure, Switzerland has been tightening its legislation: in 2025–2026, sanctions compliance was integrated into the anti-money laundering law, a new anti-corruption strategy for 2026–2029 was adopted, and oversight was strengthened. However, international organizations such as the FATF and OCCRP continue to point to gaps in the monitoring of high-risk clients — politically exposed persons (PEPs) from countries with corruption risks.
Experts note that Switzerland finds itself caught between a rock and a hard place: on one side are reputational risks and the threat of secondary sanctions from the US; on the other, traditional banking secrecy and the desire to preserve its status as a global financial hub.
It remains to be seen whether the current investigations will lead to systemic change or remain confined to individual banks. However, pressure from Washington, the EU, and international NGOs is clearly mounting, and the coming year may prove decisive for the reputation of the Swiss financial system.