UBS Reveals Suspected New Abacha Funds

by Carla Johnson, Investors Offshore.com

22 February 2002

UBS, one of Switzerland's largest banks, revealed on Wednesday that it is blocking some $60 million in an account now thought to be connected to the family of the late Nigerian dictator, Sani Abacha.

According to UBS, which has reported its suspicions to the Swiss Federal Banking Commission and the Money Laundering Reporting Office, questions were raised during internal control procedures, when an account containing SFr100 million ($60 million) which had shown no movement since 1999 was uncovered. The account holder, according to the Swiss bank, was a long-standing customer and British businessman, who had opened the account with his two Nigerian business partners in 1996.

When UBS received a list of suspect names and organisations from the UK FSA, they quickly realised that one of the business partners had assumed a false identity, and despite repeated denials of any political connections from the - as yet unnamed - businessman, investigated and subsequently froze the account.

Although UBS's announcement that it has frozen the funds clearly demonstrates a desire within the Swiss banking sector to maintain new standards of transparency and openness, the whole situation must be more than a little embarassing for the bank, which spearheaded the campaign in Switzerland for more stringent 'know your customer' rules and controls.

Speaking earlier this week, the Chief Risk Officer for the organisation's Swiss branch, Hans-Peter Bauer, said that the bank: 'deeply regretted that this relationship with UBS was not prevented at the outset and was not discovered earlier.'

The Federal Banking Commission on Wednesday announced that it too would be investigating why the suspect funds were not discovered earlier. Mr Bauer commented that UBS was satisfied with the quality of its internal controls, but that if its own investigations found any evidence of 'improper behaviour' on the part of its staff members, it would be taking 'appropriate action'.

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