The U.K. law firm that Swedbank hired last year to investigate vast flows of illicit funds through its accounts has identified almost $5 million worth of transactions that may have breached U.S. sanctions, the Swedish lender disclosed Wednesday.
The firm, Clifford Chance, began its internal investigation for the bank in February 2019, when SVT and other news outlets reported that, over the course of a decade, the lender’s branch in Estonia handled almost $6 billion for legal entities controlled by parties in Russia and other former Soviet states.
The investigation, which examined all U.S. dollar-denominated transactions involving the bank’s affiliates in Estonia, Latvia and Lithuania from March 2014 to March 2019, uncovered 586 transactions worth a combined $4.8 million that may have violated U.S. sanctions, the bank, Sweden’s largest by assets, said in a statement Wednesday.
“This shows that the bank’s process for know-your-customer, transaction monitoring and internal governance and control have had shortcomings,” Swedbank chief executive Jens Henriksson said. “We are now immediately proceeding with a self-report to OFAC [the U.S. Treasury Department’s Office of Foreign Assets Control].”
Almost all of the transactions occurred in 2015 and 2016, and more than 85 percent of them were salary payments or funds transfers linked to an unidentified vessel whose owner and operator was based in Crimea and held accounts with Swedbank in the Baltics, the lender said.
Russia annexed the Crimean peninsula in March 2014 after seizing the region from Ukraine by force. Russian authorities and business figures implicated in the annexation have been subject to U.S. and EU sanctions ever since.
Michael Casey, an attorney with Kirkland & Ellis International in London, told ACAMS moneylaundering.com that Swedbank’s statement shows that banks with poor anti-money laundering controls often expose themselves to wide range of compliance violations.
“If OFAC decides to bring an enforcement action, the penalty it seeks to impose primarily will hinge on two factors: whether OFAC considers the violations to be egregious and whether Swedbank receives self-disclosure credit,” he said.
Clifford Chance’s final report on the internal investigation, which covers all 30 billion transactions the lender processed from 2007 through early-2019, including around 15 billion transactions from the Baltics, will be published March 23.
Contact Koos Couvée at firstname.lastname@example.org
|Topics :||Anti-money laundering , Counterterrorist Financing , Know Your Customer|
|Source:||U.S.: OFAC , Sweden|
|Document Date:||March 11, 2020|