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Switzerland’s Federal Criminal Court has officially closed proceedings against UBS in the high-profile Mozambique “hidden debt” case.
This decision follows UBS’s 2023 acquisition of Credit Suisse, which led to the bank inheriting various legal challenges, including this one linked to a massive corruption scandal that severely impacted Mozambique’s economy.
The court ruled that criminal liability for the case did not transfer from Credit Suisse to UBS after the latter’s takeover.
In a statement, the court clarified that the collapse of Credit Suisse in March 2023 resulted in the firm’s removal from the commercial register, effectively dissolving the entity accused of criminal wrongdoing. As a result, the criminal proceedings against UBS were dismissed.
The case dates back to 2013, when Credit Suisse provided loans to Mozambique’s state-owned companies for maritime projects, including tuna fishing and shipyard ventures. However, a significant portion of these funds was misused for bribes, while the Mozambican government concealed the debt from parliament.
The scandal, which involved loans totalling approximately $2 billion, led to Mozambique defaulting on its sovereign debt, a sharp currency devaluation, and the suspension of financial support from institutions such as the International Monetary Fund and the World Bank.
In 2021, Credit Suisse was fined $475 million in a settlement with US, UK, and Swiss authorities. However, after the bank’s collapse in 2023, the Swiss government facilitated UBS’s takeover, which has been burdened with resolving the aftermath of Credit Suisse’s legacy, including this case.
A UBS spokesperson expressed relief, stating, “We welcome the court’s recognition that UBS cannot be held liable in this matter.” They emphasised that criminal liability cannot be inherited through a merger.
The Swiss Attorney General’s office, however, indicated it may appeal the ruling, and proceedings against a former Credit Suisse compliance officer continue.
The decision marks a key moment in the ongoing fallout from the scandal that continues to affect both Swiss banks and Mozambique’s financial recovery.
