SEB fined for Baltic money laundering breaches

SEB became the latest Scandinavian bank to be fined by regulators for weak anti-money laundering controls and governance in its Baltic Sea operations, in a scandal that has hurt the image of northern Europe.

Thursday, Swedish regulators SEB fine, the big Stockholm-based lender controlled by the industrial family Wallenberg, 1 billion kroner (107 million dollars) for failing to identify the risk of potential money laundering in Estonia, Latvia and Lithuania. Estonian regulators also fined him € 1 million.

“Despite the increased risk of money laundering in the Baltic States, the bank has acted too little and too late,” said Erik Thedeen, CEO of the Swedish Financial Supervisory Authority.

SEB’s fine is a quarter of the level imposed by Swedish regulators on Swedbank, Sweden’s oldest bank and the Baltic states’ biggest lender. Both Swedbank and Danske BankDenmark’s biggest lender that has had its own € 200 billion money laundering scandal ousted its managing directors and chairmen over their dirty money problems.

SEB recently replaced its head of the Baltic bank but has otherwise not changed its senior manager or director on the case. The bank said Thursday it had received a “remark” from regulators, which it said was a “lower degree of administrative penalty.”

Johan Torgeby, chief executive, said the bank would analyze the decision. “We always strive to comply with applicable regulations and our high internal standards, and we are continually developing the bank’s capabilities to prevent, detect and report suspicions of money laundering and other types of financial crimes,” said he declared. “This work is of the highest priority and will never end, not least because crime is constantly finding new avenues.”

Swedish regulators investigation the period between 2015 and 2019. This was after the main money laundering allegations that Swedbank and Danske faced, which took place from 2008 to 15 or so.

The investigation found that SEB had “shortcomings in identifying and managing the risk of money laundering” from some non-resident customers and owners. Non-resident customers – that is, those who are not based in the Baltic States, but often reside in Russia or other former Soviet states – were also at the heart of Swedbank and Danske’s problems in the Baltic States.

The Swedish regulator complained that SEB’s internal control functions were insufficiently resourced and that, despite the bank’s attempts to remedy this, it still did not comply with the law.

Swedbank and Danske are also under investigation by US regulators. Shareholders fear imposing higher fines than local authorities.

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Jamie Collins

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