Denmark's FSA asks police to probe Nordea Finans Danmark's compliance on money laundering
Investigation into Nordea Finans Danmark's Money Laundering Compliance
(Corrects throughout to specify that target of probe is the Nordea Finans Danmark unit, not Nordea Bank as a whole)
Background of the Investigation
COPENHAGEN, May 4 (Reuters) - Denmark's financial supervisory authority (FSA) said on Monday it had asked Danish police to investigate whether Nordea Bank's Nordea Finans Danmark unit has failed to comply with money laundering regulations on customer due diligence.
FSA's Assessment and Findings
• The FSA said in a statement it had assessed that Nordea Finans Danmark did not have sufficient knowledge of individuals within a larger group of customers who were issued with credit cards.
• The assessment was based on the FSA's inspection at the bank's Danish subsidiary Nordea Finans Danmark in June 2023.
Deficiencies in Customer Due Diligence
• "The company did not conduct a sufficient assessment of why the customer wanted a credit card and what the credit card was to be used for," the watchdog said.
• It added that it assessed there was a systematic deficiency and that the notes Nordea Finans Danmark had made in its customer files were insufficient to assess the purpose and intended nature of the business relationship.
• It said Nordea Finans Danmark had also failed to conduct a risk assessment, including risk classification, for a large group of customers.
Risk Factors and Regulatory Concerns
• "The company thus failed to address whether there were specific risk factors that, from a money laundering and terrorist financing perspective, entailed an increased risk associated with the customer relationship," it said.
Response from Nordea Finans Danmark
• Nordea Finans Danmark said it disagreed with the FSA's assessment, adding that its report to the police and its proposed fine were disproportionate.
• It said neither Nordea Finans Danmark nor the watchdog had found any suspicion of money laundering in the cases and that it had already complied with two orders it received after the FSA inspection in June 2023.
• "We must make it clear that there is a difference between something that could have been better and something that is a criminal offence," Nordea Finans Danmark said.
Reporting and Editorial Information
(Reporting by Jesus Calero in Gdansk and Louise Rasmussen in Copenhagen, editing by Terje Solsvik)
