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Danske Bank must rectify its anti-money laundering and counter-terrorist financing (AML/CTF) deficiencies by June 30, 2022, the Finansinspektionen (FI) has warned.
Danske Bank has not sufficiently assessed the risk of how the bank’s products and services in Sweden may be used for money laundering and terrorist financing, according to Sweden’s financial regulator.
The FI opened an investigation in June 2020 with the aim of investigating compliance with Sweden’s 2017 Anti-Money Laundering and Counter-Terrorist Financing Act and the FI’s regulations regarding measures against money laundering and terrorist financing.
The investigation identified deficiencies in Danske Bank's work to combat money laundering and terrorist financing.
The bank has rectified some of the deficiencies and presented action plans for, in part, the insufficient general risk assessment and how the bank's products and services may be used for money laundering.
However, the FI takes the position that the bank is taking too long to implement the measures, leading it to issue an injunction on Danske Bank to take remedial action by June 2022.
"The general risk assessment is crucial for how a bank designs its work to combat money laundering and terrorist financing since it establishes the basis for significant parts of the bank's other measures in this area,” said Karin Lundberg, the FI’s banking director.
It is, therefore, extremely important that the bank addresses this shortcoming urgently, she urged.
Danske Bank, headquartered in Denmark, is Denmark’s largest bank, but also has a presence in neighbouring Sweden.
It is no stranger to AML scandals, having been at the forefront of one of the EU’s biggest ever AML failures, which was exposed between 2017 and 2018. Around €200bn of suspicious transactions flowed, via the Estonian branch of the bank, from sources in Estonia, Russia and Latvia in a time period spanning 2007 until 2015.
The scandal led to the bank being exiled from the Baltic state, and its then chief executive, Thomas Borgen, was forced to resign before facing criminal proceedings from the Danish authorities.
