Denmark’s financial watchdog reported Jyske Bank to Danish authorities for allegedly violating the country’s anti-money laundering (AML) law.
The Danish Financial Supervisory Authority (FSA) said Monday it found “significant deficiencies” in the bank’s due diligence measures, among other issues, according to a statement in Danish translated to English.
The three potential violations of the Danish AML law involved due diligence measures, enhanced customer knowledge procedures, and recordkeeping obligations related to the bank’s mortgage and private banking departments. The alleged shortcomings related to Jyske Bank’s handling of several high-risk customers, as well as a failure to investigate suspicious transactions.
Jyske Bank said the FSA filed a police report “for the violation of provisions of the Danish anti-money laundering act on client due diligence procedures and duty of inspection,” in a statement Monday.
“Jyske Bank is now awaiting the police investigation of the matter. We will cooperate with the police on all issues of the matter, and we hope for a quick decision,” said Peter Schleidt, managing director of Jyske Bank, in the statement.
The third-largest bank in the Danish market, Jyske Bank has 156,000 shareholders and 35.2 billion Danish kroner (U.S. $4.9 billion) in equity, according to its website.
Jyske Bank said the FSA completed a money laundering inspection of the bank in September. The inspection report, which the FSA posted in Danish on its website, noted “shortcomings” that were related “primarily to a small number of home loans in Southern Europe.” The bank took steps at that time to address the issues highlighted by the FSA.
For its part, the bank contended there is a “limited risk” it has been exploited for money laundering. The bank said the portfolio highlighted in the FSA inspection report focused on 210 home mortgage loans controlled by foreign clients. The loans do not provide access to payment accounts or cards with the bank to those foreign clients, the bank said.
“Jyske Bank assesses to have a good understanding of the clients and the origin of the funds. The bank has physically visited all clients and their properties and also before the inspection, notifications about the portfolio were made on the basis of ongoing monitoring,” the bank stated.
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