As finews also reported, the U.S. Financial Crimes Enforcement Network (FinCEN) entered into a consent order with UBS on Aug. 3, 2026, imposing a $125 million civil money penalty and branding the Swiss banking giant a «repeat offender.»

FinCEN? Even among industry professionals, the acronym is hardly a fixture. At MBaer Merchant Bank, more than one employee probably had to look up what it stood for when, in a «Notice of Proposed Rulemaking» (NPRM) published on Feb. 26, 2026, the agency raised the prospect of cutting the bank off from all dollar transactions.

One agency, two entirely different cases, two entirely different instruments. From a Swiss vantage point, it is worth taking a closer look at Vienna, Virginia, where FinCEN — a «bureau» attached to the U.S. Treasury — is headquartered. Unlike the notorious OFAC (Office of Foreign Assets Control), FinCEN remains a largely unfamiliar name to many bankers outside the United States.

Who Is FinCEN?

FinCEN was established in 1990 as the Financial Crimes Enforcement Network within the U.S. Treasury. Its original task: to analyze the financial data reported under the Bank Secrecy Act (BSA) — chiefly Suspicious Activity Reports (SARs) and currency transaction reports — and make it usable for law enforcement.

Regulatory powers were added in 1994; the PATRIOT Act of 2001 anchored FinCEN as a standalone bureau within Treasury and designated it the official Financial Intelligence Unit (FIU) of the United States — the body through which the international exchange on suspected money-laundering cases runs, within the framework of the Egmont Group (147 national FIUs).

Outsourced Oversight

By U.S. standards, FinCEN is a comparatively small agency: roughly 300 employees and an annual budget in the low hundreds of millions. It conducts no on-site examinations of its own and, under the Bank Secrecy Act, delegates its supervision entirely to other authorities: the banking regulators, the Internal Revenue Service (IRS) and — in the case of broker-dealers such as the UBS unit — the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC) and self-regulatory organizations such as FINRA and the NFA.

FinCEN nonetheless retains the «overall authority for enforcement and compliance.» It pulls the threads together and hands down the large, headline-grabbing fines, often downstream of — and crediting — the penalties imposed by the SEC, FINRA or the CFTC. In the UBS case, $48 million of the $125 million was credited in this way, drawn from SEC ($20 million), CFTC ($8 million) and FINRA ($20 million) payments.

Under Political Pressure

On the political front, FinCEN has for years faced criticism for being too slow and too toothless. Its sharpest weapon, the «special measures» under Section 311 of the PATRIOT Act, has been deployed since 2002 against just three jurisdictions and eight financial institutions (MBaer included). A dedicated division for this instrument, the «Global Investigations Division,» had even been created for the purpose in 2019.

In its first three and a half years, however, that division did not close a single case, prompting Congress to take notice. Political pressure also mounted to show visible results against cartels, fentanyl networks and — since 2025, under the «FEND Off Fentanyl Act» — against Mexican financial institutions.

The two measures against Swiss institutions — MBaer with a Notice of Proposed Rulemaking under Section 311, UBS with a straightforward settlement («consent order») — mark the two extremes on FinCEN's scale of instruments.

FinCEN's «Toolkit»

The UBS case rests on the classic civil enforcement instruments of the Bank Secrecy Act. Such a proceeding is not litigated in public but recorded in a negotiated «consent order» that the bank signs.

Put simply: when several fines rain down from the upstream authorities, there is a high probability that FinCEN, too, will step in.

«Business as Usual»

For the bank concerned, the whole procedure is highly predictable. As long as it pays and commits to remedial conditions, it stays inside dollar clearing and can carry on. Legal «business as usual.»

For civil money penalties of this category, the UBS case is no exception but joins a string of recent FinCEN actions against banks and broker-dealers: as part of a $3 billion overall deal with the U.S. Department of Justice, TD Bank (headquartered in Canada) agreed to a FinCEN fine of $1.3 billion. It remains by far the largest fine FinCEN has ever imposed, over systematic anti-money-laundering failures that, among other things, allowed drug traffickers to use the banking system.

UBS: External Review of More Than $10.5 Billion in Payments

Citing an underfunded AML program, weak customer identification and at least 160 unfiled suspicious activity reports, U.S.-based Canaccord Genuity agreed in March to pay $80 million to FinCEN, plus $20 million each to the SEC and FINRA.

UBS Financial Services, the U.S. UBS unit holding a broker-dealer license, had already paid $14.5 million in 2018 for similar shortcomings: inadequate monitoring of international payments and insufficient due diligence on high-risk clients from Russia and Latin America. FinCEN cites the — in its view — insufficient remediation of those shortcomings explicitly as grounds for the «repeat offender» designation in the measure just announced.

The conditions imposed on UBS this time: a «SAR lookback» review of all unmonitored foreign-currency transactions (more than 61,500 transactions worth over $10.5 billion between January 2019 and June 2023) by an independent examiner, with a report due within 180 days; and an independent review of the entire AML program within nine months, with explicit priority on what FinCEN calls its «Priority Illicit Finance Risks»: the U.S. southern border and drug cartels, Iran, Venezuela and Russia.

The Nuclear Option

At MBaer, by contrast — which held no U.S. license and, as far as is apparent, conducted no business there — FinCEN activated the nuclear option: Section 311 of the PATRIOT Act allows it to designate a foreign bank a «primary money laundering concern» and impose one of five graduated «special measures.» These range from heightened recordkeeping requirements to the fifth and harshest: effective exclusion from the U.S. correspondent banking system, and thus from dollar clearing.

The process is complex and drawn-out. Before a proposed measure is published, an extensive consultation is conducted among various U.S. agencies. The State Department and the Federal Reserve, among others, are given the opportunity to comment.

A Complex Procedure

A Notice of Proposed Rulemaking with a public comment period then follows, after which comes a «final rule.» For MBaer, the comment period ran until April 1, 2026; a final rule has yet to be issued.

That may also be because MBaer took itself out of the running. Even the NPRM — a mere proposal for a measure — effectively leads to immediate exclusion from dollar clearing.

In MBaer's case, J.P. Morgan discontinued its services as correspondent bank, cutting MBaer off from international payments. Given this situation, MBaer Merchant Bank withdrew its appeal to the Federal Administrative Court against the license revocation that Finma, the Swiss banking supervisory authority, had ordered shortly before. The bank has been in liquidation ever since.

Why MBaer?

Earlier Section 311 cases, such as FBME Bank (Cyprus/Tanzania) or Bank of Dandong, dragged on for years, in some instances with litigation reaching U.S. federal courts.

Currently subject to Section 311 or in proceedings are, among others, the Commercial Bank of Syria and the crypto-linked players Bitzlato, Huione Group and PM2BTC. In the summer of 2025, FinCEN acted for the first time under the FEND Off Fentanyl Act against three Mexican institutions: CIBanco, Intercam and Vector Casa de Bolsa.

Why the Swiss MBaer Merchant Bank landed on FinCEN's radar at all is an intriguing question whose answer remains outstanding. FinCEN's communication points to transactions with unsavory Iran, Russia and Venezuela-PDVSA connections. Yet their total volume — a good $100 million since 2019 — makes the classification of MBaer as a «primary money laundering concern» appear questionable.

On top of that: presumably while FinCEN was setting its machinery in motion with the consultation of the other U.S. agencies, an enforcement proceeding by Finma was under way at MBaer that appeared aimed more at restoring proper anti-money-laundering conditions at the bank than at revoking its license. Was Finma informed in advance of the planned U.S. action and decided, for that reason, to order the revocation?

FinCEN Toughens Its Stance

We return to the question posed at the outset: how dangerous is FinCEN for Swiss banks?

As the record shows, FinCEN uses Section 311 very rarely, slowly and almost exclusively against small, politically unprotected institutions with no meaningful lobby. Preferably, though, they hail from jurisdictions the Americans dislike. MBaer largely fits this picture. But the fact that a Swiss institution has come into the crosshairs of the nuclear option for the first time is troubling. For politically unprotected institutions are plentiful in Switzerland.

A Cause for Concern for Swiss Institutions

If, per the MBaer precedent, documented improper transactions of $100 million over six years can already be enough to draw a Notice of Proposed Rulemaking, that bodes ill. Other banks can only hope that FinCEN's public communication reflects merely the tip of the iceberg at MBaer — or that among the documented cases (eight in number) there are ones so serious that they would scarcely occur at other banks.

For larger institutions, and in particular those with a U.S. license, the FinCEN problem is likely to remain focused on the infinitely more harmless civil money penalties. Here, too, a tougher approach is to be expected, as FinCEN has shown with its recent dollar records: TD Bank among banks, UBS Financial Services in the broker-dealer category.