Latvia fines Swedbank for failings in anti money laundering measures

By bne IntelliNews November 23, 2016

The Latvian branch of the Swedish banking group Swedbank said on November 23 it will implement measures to curb money laundering. The pledge follows an audit and a fine of €1.36mn from the country’s Financial and Capital Markets Commission (FKTK).

The fine against the Swedish group comes as Latvia seeks to clamp down on a banking sector that carries a poor reputation. The country's boutique banks have often been found to facilitate illegal money flows, largely from Russia and other CIS countries. However, the Scandinavian banks that dominate in the Baltic region have faced little criticism until now.

The FKTK audit found deficiencies in Swedbank’s internal control systems, processes and documentation. The watchdog slapped a fine of €1.36mn on the bank before agreeing on a correction programme.

“The bank is currently implementing a series of measures aimed at improving its internal control systems,” Swedbank said in a statement.

Latvia has long been under suspicion from the EU, the US, as well as international organisations such as the OECD for being too liberal on money of unclear origin. About half of all money held in Latvian banks are non-resident deposits, often coming from Russia and other countries of the former Soviet Union. The country's lenders have been implicated in moving money connected to several major corruption cases in recent years.

Latvia has stepped efforts of late to tackle the problem. A number of banks were fined or otherwise punished, most recently the Estonian lender Versobank.





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