Credit Suisse fined over Tuna Bond Scandal - expert comment
Dr Stephen Connelly from Warwick Law School comments on the news that investment bank Credit Suisse has been fined £147m by UK authorities over a corruption scandal involving Mozambique's tuna fishing industry:
"Mozambique was sucked into a huge debt of which it had no knowledge before the scandal broke. Corrupt officials and employees of Credit Suisse allegedly received kickbacks from a contractor in order that contracts be signed in Mozambique’s name, effectively leaving the people of Mozambique on the hook for money that never reached them. A Swiss bank and an African nation, but at the heart of this was that bank’s London branch and those who used and allegedly abused English law to force Mozambique to pick up the tab.
"Credit Suisse’s acknowledgement that it has committed serious financial due diligence failings could undercut an argument under English law that it had no knowledge of the alleged fraud, that any tainted contract is binding and that the corruption is a risk that falls at Mozambique’s door. Mozambique can now strengthen any argument that Credit Suisse did know or ought to have known about the financial crime given the alleged due diligence failings, and that any tainted contract is voidable. While Credit Suisse has now pledged to forgive USD200m of the debt as part of the settlement with the FCA, US SEC and Swiss Authorities, there remains over USD1.1bn of debt linked to the deal which is still disputed."
21 October 2021
READ: Dr Connelly discusses this issue in an article for the Journal of International Economic Law:
Stephen Connelly, The Tuna Bond Scandal: The Continued Lack of Transparency in Bank-to-State Credit Facilities Agreements, Journal of International Economic Law, 2021;, jgab029, https://doi.org/10.1093/jiel/jgab029