Swiss authorities announced on Monday that they have filed charges against a former executive of Credit Suisse (now part of banking giant UBS Group AG) for alleged money laundering linked to state-owned companies in Mozambique. The bank is also accused of failing to implement adequate anti-money laundering measures.

The Swiss Attorney General's Office stated that Credit Suisse, which was acquired by UBS Group AG two years ago, provided loans totaling over $2 billion to three state-owned companies in the African country in 2013. Three years later, these transactions were exposed as the "Mozambique debt scandal," prompting the office to launch an investigation in 2020.

The indictment, filed on November 25, focuses on a 2013 fund transfer of nearly $7.9 million from Mozambique's Ministry of Economy and Finance to a Credit Suisse account in Switzerland. The Attorney General's Office noted that the majority of these funds were subsequently transferred to multiple accounts in the UAE.

According to the indictment, Credit Suisse's compliance officers identified red flags suggesting the funds from Mozambique "may have originated from criminal activities." However, they allegedly advised senior management not to report the case to Switzerland's Money Laundering Reporting Office (MROS), recommending only the termination of the business relationship.

It was not until 2019, after the U.S. Department of Justice initiated criminal proceedings related to the Mozambique loans, that Credit Suisse reported the case to MROS.

The Swiss Attorney General's Office accused the unnamed compliance officer of negligence, enabling the money laundering, while also asserting that Credit Suisse failed to take "necessary and reasonable" measures to prevent it.

The office further stated that UBS Group AG is now facing potential "criminal liability" in the case.

In an emailed response, UBS Group AG said: "We firmly reject the Attorney General's conclusions and will vigorously defend our position."

The Swiss authorities also disclosed that criminal proceedings are underway against two additional individuals connected to the Mozambique case.

This case is part of a series of crises that ultimately led Swiss officials to facilitate the merger of Credit Suisse with UBS Group AG in 2023. UBS Group AG has since been addressing legacy issues from its former rival, including settling fines related to Credit Suisse's dealings with the collapsed hedge fund Archegos Capital Management two years ago.