Swedish regulator to Danske Bank: Fix AML failings faster

The Financial Supervisory Authority (“Finansinspektionen,” or “FI,” in Swedish) issued a press release Wednesday laying out its issues with Danske Bank’s AML/CFT protocols. The FI launched an investigation in June 2020 against Danske, alleging the bank was not in compliance with Sweden’s Anti-Money Laundering and Counter-Terrorist Financing Act of 2017.

“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,” the agency said. “However, FI takes the position that the bank is taking too long to implement the measures. Therefore, FI is issuing an injunction on Danske Bank to take remedial action.”

Danske Bank submitted an action plan on how it intends to address the FI’s concerns, but the agency found the measures to be insufficient. Danske must now conduct another risk assessment of its AML/CFT protocols by June 30, 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. It is therefore very important that the bank rectify this deficiency promptly,” Karin Lundberg, executive director of the FI’s Banking section, said in the press release.

Satnam Lehal, Danske Bank’s deputy chief compliance officer and head of financial crime compliance, said in an emailed statement the bank has been “undertaking a multi-year enhancement to its financial crimes controls and has made significant progress since 2019. We remain on track to complete this work by the end of 2023.”

Lehal continued, “We acknowledge the Swedish FSA’s decision on intervention. The bank had already identified the need for greater work on product and service risk assessment, but we note the FSA’s decision to require the bank complete this work sooner than currently scheduled.”

Danske Bank has been beset by allegations its AML/CFT program failed to prevent more than $200 billion in dirty money from being laundered through its Estonia branch from 2007-16. The scandal led to the resignation of the bank’s CEO in 2018 and to investigations of its AML program by regulators in Estonia, Denmark, France, and the United States.

Earlier this year, Danske reported it released a forensic audit to regulators detailing how criminal actors managed to use the bank to launder money for so long. The audit, however, has not been made public.