Established Swiss private banks are again being named in connection with sanctioned Russian billionaires. Now the talk is of possible links to UBS.

The confidential information related to Russian bank clients that leaked in a hack last September is having broader implications.

A new investigation released by the International Consortium of Investigative Journalists (ICIJ) titled «Cyprus Confidential» is drawing broad coverage in several media worldwide, as it reveals further details of the financial industry's role in connection with the Putin regime in Russia.

«Countless Links»

For Swiss finance, the new disclosures are controversial. According to the Swiss daily newspaper «Tages-Anzeiger» (paywall, German only), the ICIJ found «countless links» between Russian oligarchs and Swiss banks. According to the paper, the information shows that around 20 such Russian clients potentially still had at least one Swiss bank account after the first invasion of Ukraine in 2014. The ostensible connection was often through companies they either owned or had a stake in.

All 20 of them have been sanctioned in the meantime, most of them in Europe and the US, and some of them in Ukraine. Information related to the banking relationships leads to UBS and Credit Suisse as well as Julius Baer and Gutzwiller Bank. The trail also draws in J.P. Morgan and Bank CIC in Basel.

Journalist Payments

Right now much of the speculation centers around Alexei Mordaschov. The wealthy Russian was the owner of media that supported the regime of the country's president, Vladimir Putin. Ostensibly, companies belonging to him paid millions to cellist Sergei Roldugin, who is generally seen as one of Putin's strawmen.

In March 2019 a payment order of 405,000 euros was sent from a UBS account belonging to one of Mordashov's companies to a Russian bank. The payment was believed to be to a German journalist who had also published articles in Switzerland and who was seen as a Russian specialist who had met Putin numerous times. 

Mordaschov was still a UBS client in 2022, the report further indicates. The question now is how long the US will look at the current situation before acting.

Strong External Pressures

This newest data leak just serves to harden views in people's minds that Swiss banks continued to maintain relationships with Russian oligarchs that were closely connected to Putin for far too long. According to estimates from the Swiss Banking Association (SBA) there were about 200 billion francs in Russian assets placed in the domestic banking system before the invasion of Ukraine in February 2022.

Even if not all the assets have been sanctioned, only a few institutes have explicitly stopped banking Russians among them the Zurich investment house Vontobel.

That situation stands in stark contrast to strong external pressures Swiss finance faces, particularly from the US, where authorities are considering whether to sanction individual Swiss banks.