5 important SFSA decisions which set the practice of today

Tomorrow, a historical sanction decision is expected to be made at the Swedish Financial Supervisory Authority's (SFSA) premises at Brunnsgatan in Stockholm. The first sanction decision under AMLD4, the first cross-border decision and the first that may be more than the SEK 50 million that has previously been the maximum fine in Sweden.

Until then, let's do a short recap of five previous money laundering sanctions issued by the SFSA.

1.     Already in 2008, one of the major sanctions in the money laundering area was issued. Forex Bank received a warning and maximum fine of SEK 50 million. Forex had, according to SFSA, "structural and recurring deficiencies in all central areas" in its measures against money laundering and terrorist financing.

2.     In 2013, Nordea Bank received a remark and a penalty fine of SEK 30 million for deficiencies in sanctions regulations compliance. Nordea was deemed to have had insufficient routines to ensure that no customers or beneficial owners was listed in the sanction regulations. Nordea was also found to have had violated requirements to immediately report transactions on frozen accounts.

3.     During the years, several companies, such as currency exchange offices and registered payment service providers, have been ordered to cease operations by the SFSA. But only once so far, the SFSA has revoked a license due to deficiencies in the company's measures against money laundering and terrorist financing. This was in 2014 and happened to the credit institution Exchange Finans. The shortcomings were considered so serious that the SFSA assessed that there was an obvious risk that Exchange Finans had been used for money laundering and terrorist financing. The action plan communicated by the company to SFSA was not deemed sufficient to mitigate the deficiencies.

4.     In 2015, the results came in of SFSA's supervisory investigations of the four larger banks' Swedish operations. Handelsbanken received a remark and SEK 35 million in penalty fine for significant deficiencies in its measures against money laundering and terrorist financing. According to SFSA, the bank had failed to implement the risk-based approach since it, among other things, did not categorize all its customers by risk and did not conduct the enhanced due diligence measures accordingly.

5.     Nordea, in turn, received a warning and maximum fine of SEK 50 million. The bank was assessed to have had major deficiencies, for several years, in its anti-money laundering and counter terrorist financing work. The bank had not adequately assessed the risks, not obtained enough information about the customers and the automatic system for monitoring transactions was considered to be "extremely substandard". In the decision, the SFSA wrote that "anyone who has wanted to launder money or finance terrorism has very likely been able to do so without Nordea being able to detect it".

There we have them. The sanction decisions that have characterized the AML/CTF area in Sweden until today. Tomorrow's sanction decision, whatever it will be, is the first in the area in five years and it will set new practices and standards that will undoubtedly affect us all in the future.