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Swedish regulator fines Swedbank record USD 390 Million for AML deficiencies

Swedbank AB has been issued a record 4 billion Swedish Krona (USD 390 million) administrative fine for what Sweden’s financial watchdog called “serious deficiencies in its management of the risk of money laundering in its Baltic operations.” That conclusion was drawn from parallel investigations conducted by Swedish Finansinspektionen (FI) and Estonian Finantsinspektsioon into parent company Swedbank AB and its subsidiary bank Swedbank AS in Estonia with regard to both banks’ anti-money laundering (AML) practices.

The Swedish investigation regarding the bank’s compliance with Swedish legislation within AML and terrorism financing was initiated in November 2018 and covered the period April to November 2018. That investigation “focused on the business risk assessment; risk classification of customers; policies and instructions; know-your-customer files; transaction monitoring; and reporting of suspicious activities to FIUs (Financial Intelligence Units). The investigation was limited to traditional high-risk customer categories such as politically exposed persons and private-banking customers,” the FI said.

The Estonian investigation concluded that the Estonian subsidiary also had “severe deficiencies” in its AML risk control systems and that the bank failed to live up to AML requirements. “Swedbank has not invested enough in preventative measures to combat money laundering risks,” said Finantsinspektsioon Chairman Kilvar Kessler. “The banking group made choices that allowed it to service higher-risk clients without proper anti-money laundering systems and controls and without knowing to the fullest extent the money laundering risks posed from servicing these clients.” 

Find the press release of the Swedish Finansinspektionen and further documentation here:

https://www.fi.se/en/published/press-releases/2020/swedbank-fined-for-serious-deficiencies-in-its-measures-to-combat-money-laundering/

and the Estonian investigation and press release here:

https://fi.ee/en/news/swedbank-fined-serious-deficiencies-its-measures-combat-money-laundering

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