Latvia: FCMC enters into an administrative agreement with Swedbank AS, a fine imposed on the bank

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November 23 2016

The Financial and Capital Market Commission (the FCMC) and Swedbank AS have reached a settlement by agreeing on the improvements to be implemented for efficient functioning of the bank’s internal control system in order to eliminate the deficiencies established in the inspection performed by the FCMC. The agreement stipulates a fine of EUR 1,361,954 on Swedbank AS, and the penalty is lower than the maximum penalty under the law considering that the bank has already voluntarily commenced the elimination of the deficiencies established during the inspection and the implementation of the required improvements. The fine will be transferred into the government budget.

In the inspection, the FCMC has identified several infringements of the Law on the Prevention of Money Laundering and Terrorism Financing (AML/CTF) and its subordinate legislation at Swedbank AS, inter alia the bank had not paid sufficient attention to complex, inter-related transactions that had no apparent economic or visible lawful purpose. Moreover, the bank had not obtained, in due time, documents and data on the customer economic/individual activities, including transactions performed by customers to a scope that would have made it possible to verify that they were not to be considered as suspicious, thus failing to ensure sufficiently efficient functioning of the internal control system.