Anti-Money Laundering Rules in the Baltics 

SEB Bank has been the latest Scandinavian bank to be fined by regulators over weak anti-money laundering controls and governance in its Baltics operations, in a money laundering scandal that has hurt the image of the bank and Northern Europe as a whole. Read our last article how Financial Regulator (FKTK) has placed fines on the largest banks of Latvia.

 On June 25th 2020 Swedish regulators fined SEB Bank with fine of $107m for not identifying the potential risks of money-laundering and failing to comply with the anti-money laundering rules in Estonia, Latvia and Lithuania. Estonian regulators have also fined SEB Bank for €1m. “Despite the increased risk of money laundering in the Baltics, the bank has acted too little and too late,” said director-general of the Swedish Financial Supervisory Authority Erik Thedeen.

SEB Bank’s fine is a quarter of the level imposed by Swedish regulators on Swedbank. Both Swedbank and Danske Bank, Denmark’s biggest lender which had its own €200bn money-laundering scandal, ousted their chief executives and chairmen over their dirty money problems. SEB Bank has recently replaced its’ head of Baltic banking but otherwise has not changed any senior managers or directors over the money laundering affair. Johan Torgeby, chief executive, said the bank would analyse the decision. “We always strive to adhere to current regulations and our high internal standards, and we continuously develop the bank’s abilities to prevent, detect and report suspected money laundering and other types of financial crime,” he said. “That work is of highest priority and will never end, not least since crime constantly finds new ways.” Swedish regulators investigated the period between 2015 and 2019. This was after the main money laundering allegations facing Swedbank and Danske, which took place from 2008-15. The investigation found that SEB had “deficiencies in identifying and managing the risk of money laundering” from some non-resident customers and owners. Non-resident customers — meaning those not based in the Baltics, instead often residing in Russia or other former Soviet states — were at the heart of Swedbank’s and Danske’s problems in the Baltics as well. The Swedish regulator complained that SEB Bank’s internal control functions did not have sufficient resources and that, despite attempts by the bank to correct this, it had still failed to comply with the law. Both Swedbank and Danske are also under investigation by US regulators. Shareholders are concerned that they could impose higher fines than local authorities for the failure to comply with relevant anti-money laundering rules.

To find out more detailed information or should you need to receive specific information regarding the money laundering rules in Latvia or Baltics, do not hesitate to contact our anti-money laundering lawyers in Latvia at valters.gencs@gencs.eu, info@gencs.eu, +371 67240090