Statement on inspection in Frørup Andelskasse (money laundering area)
On 9 February 2021, the Danish Financial Supervisory Authority inspected Frørup Andelskasse. The inspection was an investigation of the money laundering area.
The inspection included a review and discussion of the cooperative’s fund:
- Risk assessment, policies and procedures
- Customer knowledge regarding both private and corporate customers.
- Monitoring of customers, including compliance with the duty of investigation, listing, storage and notification
- Internal controls and compliance setup
Risk assessment and summary
Frørup Andelskasse is a small local cooperative, which has its primary market area in Central and Eastern Funen as well as Tåsinge and Langeland. The cooperative is headquartered in Frørup and has no branches. Andelskassen has a traditional business model with a range of ordinary deposit and lending products, including uncomplicated financial products within the banking, mortgage, investment, pension and insurance areas.
The Danish Financial Supervisory Authority assesses that the cooperative’s inherent risk of being used for money laundering or terrorist financing is normal to high assessed in relation to the average of financial companies in Denmark. In the assessment, special emphasis is placed on the cooperative offering a number of financial products to both private customers and business customers. The cooperative has ATMs that can handle both cash payments and cash payments. The cooperative also has a cash function and handles cash deposits and withdrawals.
Following the inspection, a number of areas have given rise to supervisory reactions.
The Cooperative is instructed to revise its business procedures for establishing customer relationships so that they are clear and operational for the employees who are to use the business procedures.
In addition, the cooperative must ensure that the cooperative has business procedures in place to carry out stricter customer due diligence procedures on customer relationships that are assessed to have an increased risk of money laundering or terrorist financing.
The Cooperative Fund is also instructed to assess and obtain information on the purpose and intended nature of customer relationships and to ensure that this can be documented to the Danish Financial Supervisory Authority.
The cooperative is also instructed to carry out stricter customer due diligence procedures on all customers where the cooperative assesses that there is an increased risk of money laundering or terrorist financing.
Frørup Andelskasse is ordered to carry out sufficient customer knowledge procedures, including updating and updating customer knowledge information for all of the cooperative’s customers in accordance with the Money Laundering Act.
Frørup Andelskasse is finally ordered to ensure that the cooperative investigates suspicious transactions, including that the results of these investigations are noted and stored, and that this can be proven to the Danish Financial Supervisory Authority.