Swedbank to pay €1.36m money-laundering fine

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Swedbank, the Swedish-owned bank that is the largest financial institution in Latvia, announced November 23 it had come to an "agreement" with the financial markets regulator that includes a €1.36m fine for failures in its anti-money laundering systems.

A press release from  it Swedish head office reads:

"Lately Latvia has taken important steps in combating money laundering by the actions of the Financial and Capital Market Commission (FKTK) to increase standards for control. Following a recent audit by the Latvian Commission, Swedbank has committed to implementing a series of further actions in order to mitigate identified deficiencies.

"During spring of 2016, the Commission carried out an inspection related to the effectiveness of Swedbank’s internal control systems for the prevention of money laundering in Latvia.

"The findings include deficiencies in internal control systems, processes and documentation. Based on the audit results the Commission and Swedbank Latvia have entered into an administrative agreement. The agreement includes a fine of €1.36 million and a series of mitigating actions.

Swedbank's Priit Perens, Head of Baltic Banking, said the bank took the findings of the Commission’s audit "very seriously".

Thus Swedbank joins a long and ignominious list of banks fined for failures in their money laundering combating systems. Previously such fines have mainly been limited to the large number of smaller "boutique" banks specialising in business from Russia, Ukraine and other former CIS countries.

The Scandinavian-owned retail banks were generally regarded as "clean" in comparison, but now it appears they may not have been as blameless as they seemed.

FKTK itself gave a few more details about the agreement it had reached with Swedbank.

"In the inspection, FKTK has identified several infringements of the Law on the Prevention of Money Laundering and Terrorism Financing (AML/CTF) and its subordinate legislation at Swedbank AS, inter alia the bank had not paid sufficient attention to complex, inter-related transactions that had no apparent economic or visible lawful purpose," FKTK said

In addition the bank had not obtained, in due time, documents and data on its customers' economic and individual activities, "including transactions performed by customers to a scope that would have made it possible to verify that they were not to be considered as suspicious, thus failing to ensure sufficiently efficient functioning of the internal control system." 

According to the wording of the Credit Institution Law FKTK was entitled to impose a fine in the amount of up to 10% of the bank’s net income in the previous financial year, but agreed to a lower amount after taking into account that Swedbank had not previously fallen foul of its regulations.


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