"SEB has not sufficiently identified the risk of money laundering in its Baltic operations and has had deficiencies in its governance and control of the Baltic subsidiary banks’ anti-money laundering measures. SEB is therefore being issued a remark and an administrative fine of SEK 1 billion," an announcement from FI said.
An investigation covering the period 2015–Q1 2019, shows that SEB's subsidiary banks in the Baltics were exposed to an elevated risk of money laundering.
"This is due in part to their geographic location but also because customers with a higher risk of money laundering have been responsible for a substantial portion of the subsidiary banks' business volumes and transactions," FI said.
FI's investigation also showed that the bank has had deficiencies in identifying and managing the risk of money laundering associated with some of their non-resident customers and resident customers with non-resident owners. The bank has also not been able to sufficiently rectify deficiencies identified by the bank's control bodies during the period. In addition, SEB's internal control functions and transaction monitoring have not had sufficient resources.
FI made the assessment that, despite the bank's actions, the bank's deficiencies during the period under investigation have meant that the bank did not comply with the requirements laid down by law.
"Despite the elevated risk of money laundering in the Baltics, the bank has done too little, too late," said FI Director General Erik Thedéen.
FI's investigation of SEB was coordinated with the supervisory authorities in Estonia, Latvia and Lithuania. SEB's Estonian subsidiary is also receiving a precept and a fine from the Estonian financial supervisory authority for breaches of local anti-money laundering requirements. The bank's Baltic subsidiaries have also previously received a sanction in Latvia and an order to correct deficiencies in Lithuania.
In response, SEB made some effort to downplay the seriousness of the sanction, saying: "The [FI] has decided to issue SEB a remark, which is a lower degree of an administrative sanction that is issued when a breach has not been deemed to be serious. The FSA has also decided to issue SEB an administrative fine of SEK 1bn, which corresponds to about 14 percent of the maximum amount the FSA can impose in this case, as well as a precept to take certain measures to improve its transaction monitoring."
“SEB will now analyse the decision and revert with the bank’s view. We always strive to adhere to current regulations and our high internal standards, and we continuously develop the bank’s abilities to prevent, detect and report suspected money laundering and other types of financial crime. That work is of highest priority and will never end, not least since crime constantly finds new ways”, said President and CEO Johan Torgeby.
As previously reported by LSM, SEB was fined nearly 1.8 million euros by the Latvian financial regulator in December 2019.