SEB fined €95mn for failing to stem money laundering in Baltic states

By bne IntelliNews June 28, 2020

Sweden’s financial market watchdog Finansinspektionen (FI) fined the country’s top lender SEB €95mn for “deficiencies in its work to combat anti-money laundering in the Baltics,” it said on June 25.

“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,” FI said in a statement.

The fine is an effect of an FI investigation into SEB’s operations in the Baltic states, Estonia in particular, after the bank said late last year nearly €26bn flowed through its accounts between 2015 and early 2019 in transactions the bank identified as coming from “low-transparency non-resident Estonian customers.”

The majority of the suspected transactions – totalling €14.8bn – flowed in 2006-2007, the bank’s records showed at the time.

FI’s investigation showed that “SEB's subsidiary banks in the Baltics have been 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.

SEB is yet another Nordic bank that was exposed to have lax control of money flows through its Baltic branches. Another Swedish lender Swedbank and Denmark’s Danske Bank were, or still are, under investigation for handling billions in undocumented money.

The fine is the second that the FI slapped SEB with this year. In March, FI issued a fine of €360mn for the same shortcomings – “serious deficiencies in its management of the risk of money laundering.”

In a separate decision, the Estonian watchdog, Finantsinspektsioon, also fined SEB €1mn for “breaches of the anti-money laundering and terrorist financing systems,” it said on June 25.

“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”, SEB’s president and CEO Johan Torgeby said in a statement.

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