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Finanstilsynet Inspection Report: Danske Bank A /S sanctions screening

Statement regarding money laundering inspection in Danske Bank A / S – screening for sanctions

On 15 December 2020, the Danish Financial Supervisory Authority conducted an inspection of Danske Bank A / S (the bank). This was a functional investigation of the money laundering area as part of the ongoing supervision of the bank. The purpose of the inspection was to investigate whether the company complies with regulations containing rules on financial sanctions against countries, persons, etc.

Summary

The bank is the largest bank in Denmark. The bank operates all types of banking business, including complex financial products for investors, full service banking solutions for traders and asset management and investment. The bank has a very significant number of private customers, corporate customers and institutional customers, many of whom have complicated group structures and / or financial arrangements. The bank has subsidiaries, branches and representative offices in a number of foreign jurisdictions. The volume of transactions, including cross-border money transfers, is significant. The bank has significant activities in securities trading, including wholesale and private banking, and the bank has an extensive number of cross-border correspondent connections.

The bank’s international character, including the significant number of cross-border transactions and investment activities and the significant number of foreign customers, entails, in the Danish FSA’s assessment, that the inherent risk of the bank’s customers violating current regulations on financial sanctions against countries, persons, etc. is high. The Inspectorate has given rise to a number of risk information: The Danish FSA assesses that the fact that the bank does not have procedures for cooperation, including exchange of information, between the departments for sanction screening, customer knowledge information and transaction monitoring entails a risk that possible breaches of sanctions will not occur. discovered by the bank’s sanction screening.

The Danish FSA also assesses that the fact that there is no training of employees in the departments of the bank that deal with customer knowledge information and transaction monitoring in the prevention of sanction violations entails a risk that possible breaches of sanctions will not be discovered and passed to the bank’s team of specialists in the Sanctions and Embargo Team, which investigates possible breaches of sanctions.

The Danish FSA also assesses that matters concerning the bank’s internal controls in the area of sanctions, including that the 4-eye principle is not applied in connection with screening of customers, the organization of the control of manual processes for escalation and the organizational anchoring of the Sanctions and Embargo Team in Group Compliance involves an increased risk of employee error and abuse in the area of sanctions.

Link:

Inspection Report

Categories: Finanstilsynet Updates Inspection Reports Sanctions Regulations

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