November 30, 2022 (PA Business Reporter)
Swiss private bank Julius Baer International has been fined £18 million by the UK’s financial watchdog for “corrupt” relationships with Russian oil companies between 2007 and 2014.
The Financial Conduct Authority (FCA) said the bank’s weaknesses “create the circumstances in which financial crime of the most serious kind can flourish”.
The FCA highlighted arrangements between its banking arm, Bank Julius Baer, and Dimitri Merinson, an employee of Yukos Group, which was formerly Russia’s largest oil company but which went bankrupt in 2006.
Julius Baer would pay “finder’s” fees to Mr Merinson for introducing Yukos Group companies to the bank – meaning he received commission for his referrals.
he exchanges were made on the understanding that Yukos Group companies would place large sums of cash with Julius Baer from which it could generate big revenues, the FCA said.
The watchdog stressed that in many cases, the oil companies were charged far higher than standard rates by the bank, and that profits were shared between Julius Baer and Mr Merinson.
Mr Merinson received commission payments totalling around three million US dollars (£2.5 million) as a result of the arrangements, according to the FCA’s investigation.
The FCA concluded that the wealth management firm failed to conduct its business with integrity, failed to take reasonable care to organise and control its affairs, and was not open and co-operative with the regulator.
Anna Wise