Norwegian Regulators: AML Measures Fell Short

The Financial Supervisory Authority (FSA) in Norway said that several banks didn’t make sufficient anti-money laundering assessments in 2018, according to a report by Reuters.

The FSA released its annual report on Friday (March 22) listing all the banks that had been inspected, but it didn’t say which institutions had the issues.

In November of last year, the FSA levied criticism against Norway’s largest bank, DNB, for not putting enough failsafes in place to fight money laundering.

DNB said that fighting economic crime was a priority and that during an audit it hadn’t found any concrete examples of any violations.

Earlier this month, the head of the FSA warned that Nordic banks involved in money laundering scandals should be measured in their response and not withdraw from the area, according to a report by Bloomberg.

A number of Nordic banks have been implicated in the scandals, including Swedbank and Nordea Bank Abp.

On of the main players in the scandals is Danske Bank, whose Estonian branch was used for some 200 billion euros ($227 billion) of suspicious payments between 2007 and 2015.

“This money laundering discussion is very close to panic, and that is very dangerous,” said Anneli Tuominen, director general of the FSA in Helsinki.

Danske has a $230 billion scandal through its Estonian branch, and it’s retreating from the entire Baltic region, including Russia. Nordea is partially pulling out and Sweden’s banks might go as well, although Swedbank has said it’s not going anywhere and that it’s committed to the region.

“It would be the worst possible end result of this discussion if banks would suddenly start to withdraw money from certain markets,” Tuominen said. If there’s a lesson, she continued, it’s to “learn and do better,” not to leave.

Nordic banks are the bedrock of the Baltic financial system, and during the economic crisis in 2009, Swedish krona and banks were the ones that got hurt the most. Lenders in the region stayed and weathered the storm, and then were rewarded when the economy bounced back.

Now, all three Baltic countries are members of the eurozone, but because they’re so close to Russia, some analysts think they’re a first place of entry for criminals who want to launder money and get capital to the West.

Tuominen said she wants the EU to facilitate creation of a watchdog organization that would oversee banks.

“We need an independent EU-wide supervisory anti-money laundering authority,” she said.