Swedbank said it expects to pay 40 million Swedish krona (U.S. $3.7 million) as part of a settlement with the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) related to apparent sanctions violations.
Swedbank acknowledged the provision in a press release Friday. It said OFAC’s investigation related to “historical shortcomings” but did not specify whether the settlement will address its self-disclosure to the regulator previously announced in March 2020.
Then, the bank said Clifford Chance, a law firm it hired to investigate its anti-money laundering (AML) weaknesses, flagged about $4.8 million in transactions that could be subject to U.S. sanctions.
The probe uncovered 586 transactions involving Swedbank subsidiaries in Estonia, Latvia, and Lithuania that were conducted in U.S. dollars between March 2014 and March 2019. About 508 of the transactions were associated with a vessel owned and operated in Crimea, which is subject to U.S. sanctions.
“The dialogue with OFAC is good, but we cannot say when it will be concluded,” said Tomas Hedberg, deputy chief executive officer of Swedbank, in the bank’s release.
The scrutiny by OFAC is one of several U.S. probes Swedbank faces. Investigations by the Department of Justice, Securities and Exchange Commission, and the New York State Department of Financial Services remain ongoing, with potential financial consequences undeterminable at this time, the bank stated.
Swedbank did not say whether the investigations are focused on its historical AML deficiencies. In March 2020, the bank agreed to pay 4 billion Swedish krona (then-U.S. $390 million) to settle charges levied by a Swedish regulator regarding AML failures in its Baltic operations from 2015-19.
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