Monday, October 26, 2020

Latvia watchdog fines Swedish bank SEB over weak anti-money laundering controls

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Latvia’s financial watchdog said on Friday it had fined Swedish bank SEB a total of 1.79 million euros ($1.99 million) for lax anti-money laundering controls and for one case of violation of sanctions in the Baltic country.

The Financial and Capital Market Commission (FCMC) said an inspection in 2017 of SEB Latvia had showed the bank needed to improve internal control systems for the prevention of money laundering and terrorism financing.

A 2019 inspection had showed a case of “shortcomings in complying with Sanction Law”, it said in a statement.

SEB said in a separate statement the violation of sanctions related to a client that was a subsidiary to a company added to the EU sanctions list after the subsidiary became a client.

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The third-largest lender in Latvia said it had worked on an action plan where alleged shortcomings were addressed. “SEB Latvia commits to take further actions to strengthen the bank’s processes, systems and routines,” it said.

The FCMC said the size of the fine reflected its view the money laundering and terrorism financing risk level characterising SEB’s clients and services was low.

Latvia has fined a number of banks for slack anti-money laundering controls as it tries to clean up its banking sector following several scandals, before undergoing a review next year by Moneyval, the money laundering and terrorism financing body of the Council of Europe.

Among scandals, bank ABLV was closed last year after U.S. authorities accused it of money laundering. Outgoing central bank governor Ilmars Rimsevics is fighting charges of bribery and money laundering.

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