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Swedbank money laundering case: Bank accepts Clifford Chance report

The law firm Clifford Chance was retained in February 2019 to conduct an investigation of Swedbank’s anti-money laundering work, with forensic support from FRA and FTI. Swedbank has now received the report and it is available on the bank’s website.

The investigation includes customers, transactions and activities from 2007 through March 2019 and how the bank has handled internal and external information disclosures. Clifford Chance has examined how Swedbank has responded historically to shortcomings that have been identified. Clifford Chance notes that Swedbank has fully cooperated in its investigative work and that the bank has not influenced the conclusions.

Swedbank’s Board and parts of the Group Management received the report on Saturday, March 21, in order to have the opportunity to analyse the report.

“Clifford Chance’s report confirms the bank’s failure,” said Swedbank’s chairman, Göran Persson. “In its anti-money laundering work, the bank has not measured up to the requirements that customers, owners and society are entitled to set. We now have the facts and are working hard to solve the problems.”

Clifford Chance’s report shows that during the period 2014-2019, transactions representing a high risk for money laundering were made in the form of payments to customer accounts worth €17.8bn and payments from customer accounts worth €18.9bn in the Baltic subsidiaries. Clifford Chance cannot conclude that money laundering has actually taken place.

Clifford Chance reports that Swedbank Estonia and Swedbank Latvia actively pursued high-risk customers and Swedbank Estonia accepted certain high-risk customers who had been offboarded as customers in another bank in Estonia, when that bank had decided to discontinue their business with foreign high-risk customers.

The report also notes that high-risk customers in Baltic Banking were allowed to open accounts in the bank’s other business areas in Sweden - Swedish Banking and LC&I. Clifford Chance further notes that all of these customers have been offboarded.

The law firm writes that during the period 2007-2019, the bank’s senior management failed to establish clear lines of AML-related responsibilities and that Swedbank’s CEO’s throughout the review period all had a lack of adequate appreciation for the risk posed by the high-risk non-resident customers to the bank. Clifford Chance also notes that the management’s information disclosure to the Board has had shortcomings and that management has communicated that reported weaknesses have been addressed. The report states that it is not clear from the Board minutes that the Board has clearly put pressure on the management regarding the problems related to the work on money laundering presented to them. Furthermore, Clifford Chance considers certain statements during October 2018 and February 2019 concerning money laundering, were inaccurate or presented without sufficient context.

“It is obvious that there have been cultures in the bank that are not acceptable,” said Swedbank’s president and CEO, Jens Henriksson. “This is serious. I have initiated a review which aims to examine the culture and identify actions needed. This work is under way.”

Since last year, a number of actions have been taken to remedy shortcomings and ensure a sustainable corporate governance in Swedbank. The bank says it is implementing an action programme, which at year-end consisted of 152 initiatives. New executives have been appointed to a number of central positions, including the bank’s new chairman of the board, a new vice chairman, a new CEO and a new chief compliance officer. A new head of Group Communications and a new chief risk officer have also been recruited.

Clifford Chance writes that Swedbank, under the new management, has strengthened its anti-money laundering work and compliance with the international sanctions’ regulations.

Given the information in the investigations conducted by the Swedish and Estonian Financial Supervisory Authorities and the international law firm Clifford Chance, the board of Swedbank has also announced it has decided to unilaterally cancel the agreement of severance pay to the bank’s previous CEO, Birgitte Bonnesen. The severance pay was planned to start as of 29 March 2020. The Board has also decided not to make claims against Birgitte Bonnesen, following considerations of a legal assessment of the conditions for such a potential process.

The board of Swedbank has decided that the bank will accept the decision from the Swedish Financial Supervisory Authority (SFSA) of an administrative fine of SEK four billion, which means that the bank will not dispute the decision by the SFSA.


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