Financial watchdog to look into transactions worth USD 4.8 million through Swedbank that might have violated sanctions

  • 2020-03-12
  • LETA/TBT Staff

RIGA - The Financial and Capital Market Commission (FCMC) will look into the report by Clifford Chance legal office on  transactions amounting to approximately USD 4.8 million (EUR 4.2 million) in total through Swedbank's Baltic branches that might constitute potential sanction violations, LETA learned from FCMC.

"FCMC has contacted Swedbank and Clifford Chance to assess conclusions of the report in detail and decide on further steps. At the same time, FCMC is closely cooperating with the Swedish and Baltic watchdogs," the commission said.

As reported, the investigation of Swedbank’s work on anti-money laundering conducted by the law firm Clifford Chance has found that transactions amounting to approximately USD 4.8 million in total through the bank's Baltic branches constitute potential sanction violations, the bank reported to the Nasdaq Stock Exchange in Stockholm. 

The bank will therefore be making a report to the U.S. Treasury’s Office of Foreign Assets Control (OFAC). 

On behalf of the Board of Swedbank, the law firm Clifford Chance has been conducting an investigation since February 2019, which includes clients, transactions and activities from 2007 to March 2019 and how the bank has handled internal and external disclosures. Clifford Chance is also examining how Swedbank has responded historically to identified AML and sanctions controls shortcomings. 

In this work Clifford Chance examined all the USD denominated transactions from the three Baltic subsidiaries in Estonia, Latvia, and Lithuania, processed through the U.S financial system during the period March 22, 2014 through March 22, 2019. 

Clifford Chance has found 586 transactions amounting to approximately USD 4.8 million which constitute potential OFAC violations, 95 percent of which were processed by the Bank in the period 2015 – 2016. 508 transactions constitute salary payments and payments associated with the operation of a vessel whose owner and operator are located in Crimea and used Swedbank in the Baltics. Crimea is subject to broad U.S. economic sanctions.

Swedbank is reporting the suspected transactions to OFAC. It is now a matter for the U.S. authority to decide how to proceed with the case, and potential consequences. Swedbank says it will cooperate fully with OFAC to resolve the matter.