European banking large Nordea has agreed to pay $35 million to New York’s monetary providers watchdog following an investigation into the Helsinki-based financial institution’s alleged failure to stop cash laundering and different prison actions, together with some uncovered within the Panama Papers leak.
The New York State Division of Monetary Providers mentioned it had recognized “important compliance failures” between 2008 and 2019 by the financial institution, which did not conduct correct due diligence of its purchasers and banking companions as required by the Financial institution Secrecy Act.
“Worldwide monetary entities resembling Nordea should safeguard in opposition to prison exercise within the world monetary system, and for years Nordea failed in these respects,” mentioned Superintendent Adrienne Harris, who leads DFS, in an announcement.
In line with the regulator, Nordea’s weak compliance program uncovered the financial institution’s monetary channels, and due to this fact the New York monetary system, to “a excessive danger of prison abuse.”
The consent order cited ICIJ’s 2016 Panama Papers investigation, which uncovered a shadowy world business of legislation corporations and massive banks promoting monetary secrecy to purchasers — together with politicians, celebrities and fraudsters — all over the world.
The investigation was primarily based on 11.5 million leaked paperwork, which named 72 prospects of Nordea’s worldwide department in Vesterport, Denmark. DFS mentioned the revelations uncovered Nordea as certainly one of many monetary establishments that didn’t “comply with authorized necessities that may guarantee their prospects weren’t concerned in prison endeavors, tax evasion, or political misconduct.”
It mentioned that Nordea was linked to billions of {dollars} of suspicious transactions over roughly a decade, and that the Vesterport department was additionally implicated in two different high-profile cash laundering schemes, often known as the “Russian Laundromat” and “Azerbaijani Laundromat.”
Final month, Danish authorities indicted Nordea for violating anti-money laundering legal guidelines by failing to cease $3.7 billion of suspicious transactions involving Russian purchasers, shortcomings beforehand uncovered in a separate ICIJ investigation a decade in the past.
ICIJ media accomplice Politiken revealed in 2013 as a part of Secrecy for Sale that Russian nationals and others used providers of Nordea’s Copenhagen department to take care of about 100 offshore firms, sparking an eight-year investigation.
Nordea’s chief compliance officer, Jamie Graham, acknowledged in an announcement that the financial institution had “traditionally … underestimated the complexity of stopping monetary crime and the assets wanted for that goal.” The assertion famous that Nordea had invested some 1.5 billion euros, or roughly $1.7 billion, in anti-money laundering controls since 2015.
“The financial institution has taken important measures to enhance monetary crime processes and procedures for the reason that interval lined by DFS’s investigation,” Graham mentioned.
In line with the consent order, Nordea’s whole belongings had been price roughly $627 billion as of 2023, with its New York department holding greater than $37 billion in belongings. The financial institution’s assertion mentioned the New York fantastic would have “no materials impression on the monetary place of Nordea.”
Columbia College legislation professor John Espresso, who makes a speciality of white-collar crime, instructed ICIJ through e-mail that the settlement settlement implied the state regulators had been “very pleased with Nordea’s stage of cooperation.”
Suzanne Lynch, an adjunct professor on monetary crime at Utica College, additionally famous the heavy emphasis on cooperation. Lynch mentioned she was shocked to see scarce point out of federal-level investigations within the 44-page consent order.
“So the query stays, will the feds go after them too?” she mentioned. “They’re those that in the end actually take care of the monetary intelligence gathered.”
