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Panama Leaks Draw Warning From Sweden as Tougher Laws Considered

  • Nordea allegedly helped clients hide wealth, Panama leaks show
  • Danish FSA joins Nordic investigation of banks listed in leaks

The government of Sweden has responded to a series of leaks after Scandinavia’s biggest bank was listed as allegedly having helped clients hide their wealth in offshore accounts with a view to evading taxes.

Per Bolund, Sweden’s minister for financial markets, says he is “upset” by the revelations, which have now prompted the ruling administration to consider tightening its laws to prevent such practices.

The government needs to consider “whether the laws we have are sufficient or whether legal changes are needed,” he said in an interview on Thursday. Sweden’s Financial Supervisory Authority and Tax Agency are already investigating the allegations. “That means that we can go ahead and investigate whether there have been cases where the law hasn’t been followed,” Bolund said.

Heads Roll

The leaks, which were tied to Panama-based law firm Mossack Fonseca, have so far led to the resignation of the prime minister of Iceland and a bank executive in Austria, with the fallout across the globe likely to be far from over.

In Scandinavia, a region known for low corruption rates and high levels of transparency, locals have been shocked to learn that Nordea Bank AB was implicated in numerous alleged transgressions. The bank has since severed all ties with Mossack Fonseca and pledged to avoid “gray zones” in the kind of offshore accounting associated with tax evasion.

Sweden’s regulator is expanding its probe to look into practices at SEB AB, Svenska Handelsbanken AB and Swedbank AB, according to Victoria Ericsson, press secretary at the Stockholm-based agency. Denmark’s FSA on Friday said it will join its Swedish counterpart and investigate banks under its jurisdiction mentioned in the leaks.

Nordea was summoned by the Swedish financial regulator earlier this week to explain its appearance in the leaked files. The bank says it enforced strict rules in 2009 to prevent the use of shell companies. But offshore structures can still be used in certain circumstances as “a legal and administrative vehicle for some customers with very complex, international business,” according to the bank.

FSA Probes

Erik Thedeen, head of the FSA, said on Wednesday he spoke with Casper von Koskull, chief executive officer at Nordea, and is investigating the “serious” media claims. The regulatory scrutiny follows Nordea’s breach last year of money laundering rules, triggering a warning and a 50 million-krona ($6 million) fine, which is the maximum administrative amount that can be charged. Back then, the FSA said it found “major deficiencies” in Nordea’s work to prevent money laundering.

The latest allegations represent “a challenge for our whole industry,” von Koskull said on Thursday. Since becoming CEO in November, he says compliance has become the top priority. “My clear ambition is that we want to be best in class on this.”

Bolund cautioned that there are limits to how much lawmakers can do. “In the end, these are issues that can’t just be legislated away,” he said. “It also needs to be a discussion on methods and company culture in the finance sector.”

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