In enforcement proceedings against MBaer Merchant Bank AG that FINMA concluded three weeks ago and which were recently pending before the Swiss Federal Administrative Court, FINMA had withdrawn the bank's licence. As part of the proceedings, FINMA ascertained that the bank does not have an adequate structure in place for combating money laundering, thus enabling clients to circumvent official asset freezes. The bank has now withdrawn its appeal against the FINMA proceedings, meaning that FINMA’s liquidation order is now effective.
In the course of proceedings conducted against MBaer Merchant Bank AG, the Financial Market Supervisory Authority FINMA has ascertained serious, systematic shortcomings in terms of compliance with due diligence obligations in relation to combating money laundering, in its administrative organisation and in the bank's risk management. These shortcomings related in particular to how clients who were sanctioned by Switzerland or internationally were dealt with. The bank thus enabled clients to circumvent official asset freezes. The proceedings, which were pending until recently before the Federal Administrative Court as the result of an appeal by the bank, were concluded three weeks ago by FINMA. It had withdrawn the licence of MBaer Merchant Bank AG and consequently ordered it to enter into liquidation. A suspensive effect was granted to the bank’s appeal, and FINMA was prohibited by the court from communicating and enforcing the liquidation. The bank has today withdrawn its appeal against the FINMA proceedings, meaning that FINMA’s orders now become effective. FINMA has appointed Prof. Daniel Staehelin and Dr Lukas Bopp, both of Kellerhals Carrard KIG Basel, as liquidators.
Yesterday, the US Financial Crimes Enforcement Network (FinCEN) already recommended measures in accordance with Section 311 of the USA PATRIOT Act on combating money laundering and the financing of terrorism and rated MBaer Merchant Bank AG as a financial institution of primary money laundering concern. The measure proposed by FinCEN is currently undergoing public consultation. FINMA has provided information about the announced US measures and also on the proceedings it conducted against the bank (press release).
Supervisory law and requirements for guaranteeing proper business conduct seriously violated
In 2024, FINMA opened enforcement proceedings against MBaer Merchant Bank AG and appointed an investigating agent. This became necessary after it carried out investigations at the bank into client groups with links to sanctions imposed on Russia or in connection with criminal proceedings. The investigation revealed that 80% of the business relationships carried increased risks. Most recently, 98% of the assets received came from high-risk clients. The investigating agent found that the bank repeatedly ignored the recommendations of its compliance department in how it dealt with these business relationships without comprehensible reasons being given. It systematically failed to adequately investigate the background to the business relationships and transactions and in some cases did not fulfil its AMLA reporting obligations at all or did so far too late. In several cases, the bank also executed transactions on behalf of clients who were included on sanction lists or whose funds were frozen by domestic criminal authorities. Finally, there are specific indications that MBaer Merchant Bank AG actively aided clients in circumventing official asset freezes.
The bank did not have sufficient measures in place to combat money laundering and did not have an appropriate organisation to adequately monitor the risks. Through its conduct and inadequate organisation, it has exposed itself and the Swiss financial centre to disproportionately high risks. In doing so, it not only seriously violated the supervisory provisions on combating money laundering and the organisational rules (risk management), but also the requirements for guaranteeing irreproachable business conduct.
The case is extremely serious. The licensing requirements relating to the guarantee of irreproachable business conduct and organisational requirements were no longer met. In FINMA’s view, the systematic deficiencies could not be corrected in the present circumstances.
Finally, FINMA has opened proceedings in four cases against individuals who may have been responsible for breaches of supervisory law in connection with the matters under investigation.
MBaer Merchant Bank AG is a bank based in Zurich that operates in the private client and transaction banking segments. At the end of 2025, the bank held client assets totalling CHF 4.9 billion, maintained almost 700 client relationships and had over 60 employees.
Contact
Patrizia Bickel
Head of External Communications
Phone +41 (0)31 327 93 19
patrizia.bickel@finma.ch
