A Guide to Anti-Money Laundering for Crypto Firms
The former CEO of Swedbank has been charged with fraud and market manipulation following investigations into money laundering in the Baltics. If convicted she could face up to six years in prison.
Birgitte Bonnesen was chief executive of Sweden’s oldest bank in 2016. She was sacked in 2019 when investigations into money laundering through Swedbank’s Baltic branch found that high-risk clients had carried out more than €37bn of transactions with a high risk of money laundering between 2014-2019.
An internal Swedbank report, seen by public broadcaster SVT, found that €80bn of money flowed through the non-resident client business of the bank in the Baltics from 2008 until 2013, most of it from Russia and ex-Soviet states. But Bonnesen repeatedly spread “misleading information” that the bank did not have any issues with its anti-money laundering (AML) processes in Estonia, according to Sweden’s Economic Crime Authority.
Chief prosecutor Thomas Langrot said she either intentionally or through gross negligence disseminated misleading information about the state of the bank’s AML measures while being aware of “extensive and serious shortcomings” with the bank’s compliance systems.
Bonnesen’s lawyer says she is innocent and would be acquitted. “It’s important to see that the prosecutor is not saying she did anything for her own benefit. She has not bought or sold one single share,” he told Reuters.
Swedbank has said it will not file claims for damages against its former top executive and board. No trial date has been announced.
Swedbank was fined 4 billion crowns (€389.8m) in 2020 by Sweden’s financial watchdog for serious deficiencies in its AML processes and for withholding information from authorities investigating its role in the scandal, which also implicated Denmark’s Danske Bank.
Both Swedbank and Danske Bank are currently being investigated by US regulators over money laundering scandals amounting to hundreds of billions of euros through their branches in the Baltics.
The CEO of Danske Bank resigned in 2018 after admitting that the majority of the €200bn flowing through its Estonian branch was laundered cash flowing illegally out of Russia, the UK, and the British Virgin Islands.
The head of the Danish Financial Supervisory Authority (FSA) commented in 2020 that many of the problems that had led to money-laundering failures at Danske Bank were the result of a ”silent” deferential culture within the institution.
For compliance teams, these cases emphasize the need for clearly documented and publicized AML policies and procedures – and the importance of communicating these to key executive stakeholders who are not involved in day-to-day compliance operations. Establishing a culture of transparency, and demonstrating the benefits of a proactive approach to identifying and remediating AML violations, is also critical.
They also highlight both the ongoing transformation of the Baltic region into a growing fintech hub and the inherent risks of operating in former Soviet states. Firms need to calibrate a risk-based approach to the geopolitical reality of doing business in this region.
They also demonstrate that regulators are prepared to go beyond fines in certain circumstances and that senior managers are not immune to prosecution. In 2021, several senior managers at EU banks were put under the spotlight, including bribery and money laundering charges levied against an ex-Austrian bank CEO, and the acquittal of an ex-CEO of a Swiss bank who was accused of money laundering.
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Originally published January 7, 2022, updated February 2, 2022
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