Statement on inspection money laundering inspection in DLR Kredit A / S
In December 2020, the Danish Financial Supervisory Authority carried out an inspection of DLR Kredit A / S. The inspection was an investigation of the money laundering area. The inspection included the company’s organization, risk assessment, policies, procedures and internal controls. In addition, the inspection included customer due diligence procedures, monitoring of private and business customers, the company’s inspection, listing, notification and storage obligations as well as the company’s internal controls.
Risk assessment and summary
The company’s business model is based on traditional mortgage business, where the company provides loans against mortgages on real estate, which are financed by issuing bonds.
The company provides loans against mortgages on real estate in Denmark to finance agricultural properties – including residential farms – as well as for residential rental properties, office and commercial properties and cooperative housing. The company also provides loans in Greenland and the Faroe Islands primarily for owner-occupied housing.
The company cooperates with a number of banks, which are responsible for all customer contact and arranging the loans for the customer. The company thus only has contact with customers to a limited extent. The company is dependent on customer establishment at the departments, as this is the only way in which the company can establish customer relationships. However, the company is still required to perform its own customer knowledge assessment and transaction monitoring.
The Danish Financial Supervisory Authority assesses that the company’s inherent risk of being used for money laundering or terrorist financing is low to medium in relation to the average of financial companies in Denmark. In the assessment, the Danish Financial Supervisory Authority has placed special emphasis on the company’s business model, as well as the company’s product palette, which consists of one mortgage product.
Based on the inspection, there is only one area that gives rise to supervisory response.
The company is instructed to ensure that customer knowledge information is continuously updated for all customers in the company’s customer portfolio, including that the customer is updated if he moves abroad and that this procedure appears in the company’s business procedures.