A Swiss criminal court has discontinued proceedings against UBS in a case linked to alleged money laundering in Mozambique involving Credit Suisse, ruling that liability could not be transferred following the banks’ merger.
The court said Friday that Credit Suisse, whose actions were under scrutiny, no longer existed as a criminal-law entity after its state-backed takeover by UBS in 2023.
As a result, the court found that UBS could not be held criminally liable for alleged failings tied to its former rival.
The case relates to a long-running scandal in Mozambique, where loans arranged for a state-backed tuna fishing project triggered a major financial crisis more than a decade ago.
Swiss federal prosecutors had accused Credit Suisse of failing to prevent money laundering connected to the loans, arguing that responsibility should extend to UBS as its legal successor.
However, the court rejected that position, stating that criminal liability could not automatically pass to a successor entity following a merger.
“We welcome the court’s recognition that UBS cannot be held liable in this matter, as such liability cannot be transferred to a legal successor,” UBS said in a statement.
The decision marks a significant development in the fallout from the so-called “tuna bond” scandal, which saddled Mozambique with hidden debts and contributed to a sovereign debt crisis.
The loans, arranged in the early 2010s, were intended to finance a tuna fishing fleet and maritime security projects but were later found to involve undisclosed guarantees and alleged misuse of funds.
The scandal led to a collapse in investor confidence, the suspension of international financial support and a prolonged economic downturn in Mozambique.
While the Swiss court’s ruling ends the case against UBS at this stage, it may yet be appealed, leaving open the possibility of further legal proceedings.
Analysts say the decision underscores the legal complexities surrounding corporate liability in cases involving mergers and acquisitions, particularly when misconduct is alleged to have occurred before a takeover.
It also highlights ongoing challenges in holding financial institutions accountable for historical actions following structural changes in ownership.
For Mozambique, the broader repercussions of the scandal continue to shape its economic landscape, even as legal battles linked to the case unfold in multiple jurisdictions.
The ruling is likely to be closely watched by regulators and legal experts, given its potential implications for future cases involving cross-border finance and corporate restructuring.
