Nordea, Handelsbanken Are Fined for Money-Laundering Breach

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Sweden’s two biggest banks by market value were fined by the country’s financial regulator for breaking money laundering rules.

Nordea Bank AB got a warning and the maximum administrative fine of 50 million kronor ($6 million) after “major deficiencies” were found in the bank’s “work to prevent money laundering,” the Swedish Financial Supervisory Authority said on Tuesday. Svenska Handelsbanken AB was fined 35 million kronor.

Nordea, which said it takes the decision “very seriously,” hasn’t lived up to Sweden’s money laundering rules “for several years,” the FSA said. The bank was also fined in 2013 for similar offenses. Though those specific breaches differed from the behavior that triggered Tuesday’s fine, the FSA said the continued compliance failure “nonetheless confirms the picture of a bank that has had problems with complying with the money laundering framework.”

Chief Executive Officer Christian Clausen said Nordea acknowledges “that we initially underestimated the complexity and the resources required to be fully compliant within this area,” in a statement. According to Clausen, the bank has “taken significant measures since 2013” and “will continue to increase the resources and efforts” to make sure it lives up to the rules.

Financing Terrorism

The regulator estimates that more than 100 billion kronor are laundered annually in Sweden and said the onus is on the country’s banks to act to “prevent criminals from laundering gains.”

In the case of Nordea, there is “a high probability that, if people have tried to launder money or finance terrorism, they could have done so without Nordea having been able to detect this,” the FSA said. “This is very serious. Nordea has lacked an effective system to detect and prevent money laundering for several years.”

The regulator said Handelsbanken “has not conducted risk assessments for all of its customers or obtained sufficient information about customers and their business relations.” Its “system for reviewing transactions has also been deficient.”

Spokesman Johan Wallqvist said Handelsbanken had been aware of the regulator’s concerns and sought to address many of them. But the bank will now “put all efforts into fixing” the remaining issues, he said.

Shares in Nordea slipped 0.7 percent to 108.10 kronor as of 11:35 a.m. in Stockholm. Handelsbanken dipped 0.4 percent to 126 kronor. The 45-member Bloomberg index of Europe’s most-traded financial companies rose 0.9 percent.

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