Pressed by Washington, Switzerland’s fourth-largest bank dropped its business with Cuba, Swiss media reported.
ZÃ¼rcher Kantonalbank (ZKB), which is state-owned, had picked up a Cuba portfolio after Swiss banking giants UBS and CrÃ©dit Suisse canceled their business with the island seven and five years ago, respectively.
The Obama Administration has increased the financial pressure on Cuba, partly as a side effect of a crackdown on Iran and drug-related money laundering. The Treasury Department’s Office of Foreign Assets Control (OFAC) recently issued a record fine of $1.9 billion to Britain’s HSBC over alleged money laundering in Mexico and violations of the U.S. embargo.
ZKB “cannot avoid paying attention to embargoes and blacklists,” a bank spokesman told finance newsletter Inside Paradeplatz. “After prominent competitors bid farewell to the Cuba business long ago, due to the U.S. embargo, ZÃ¼rcher Kantonalbank is now pulling out of Cuba for the same reason.”
The bank’s move affects an unknown number of business and individual customers, as well as the Swiss-Cuban Chamber of Commerce and aid organizations such as Camaquito.Â The chamber lodged a protest with the Swiss commerce ministry.
The Kantonalbank move happened just as the U.S. government is investigating the role of Switzerland’s largest banks in tax evasion by U.S. citizens.
UBS in 2004 paid the United States a fine of $140 million, after the bank had swapped old dollar bills for new ones for Cuba-related customers.
In November, the United Nations condemned the U.S. embargo for the 21st year in a row.