Syedur Rahman, of business crime solicitors Rahman Ravelli, outlines the measures planned.
The six major banks of the Nordic region have announced that they are creating a customer checking centre to tackle money laundering.
The initiative is an attempt to boost the reputation of banking in the Balkan region after a number of scandals. The revelations of $200 billion being laundered through Danske Bank's Estonian branch, in Tallinn, from 2007 to 2015 has put the problem in the spotlight. Swedbank has also had to deal with a money laundering problem at its Estonian branch; with the amount laundered estimated to be $135 billion.
Danske Bank, along with Swedbank, DNB, SEB, Nordea and Handelsbanken are teaming up to introduce the new process of scrutinising transactions. The banks have established a joint venture company to handle data about customers. It has been given European Commission approval, in accordance with EU merger control rules, and will start work in 2020.
Danske had already said it would toughen its money laundering prevention in the wake of its Estonian problems, which have led to a number of high-profile resignations and nine senior managers being charged. Swedbank's problems have led to the dismissal of senior figures and prompted enquiries from US regulators, while Nordea has been raided by police in connection with money laundering suspicions.
The six-bank attempt to tackle money laundering will see detailed probes carried out on large and medium-sized companies as early as next year.
While the move by the banks is a big step it is necessary. The recent scandals have shaken confidence in the finance industry. Reducing KYV (know your vendors) failures and preventing financial crime should always be a priority for banks.
The banks involved in this initiative knew that action had to be taken. It now remains to be seen if the steps being introduced are adequate.
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