Statement on inspection in Borbjerg Sparekasse (money laundering area)
On 3 and 4 June, the Danish Financial Supervisory Authority inspected Borbjerg Sparekasse. The inspection was an investigation of the money laundering area. The inspection included an examination of the company’s risk assessment, business procedures and internal controls as well as the company’s customer knowledge, including monitoring of customers.
Risk assessment and summary
Sparekassen provides traditional banking services to private customers as well as small and medium-sized business customers. Sparekassen operates primarily in its local area, which includes 6 more defined postcodes.
The Danish Financial Supervisory Authority assesses that the Savings Bank’s inherent risk of being used for whitewashing or financing terrorism is medium to high. The Danish FSA’s assessment is based on the fact that banks are generally considered to have a medium to high inherent risk, and Sparekassen’s products can be used for money laundering or terrorist financing.
Following the inspection, a number of areas have given rise to supervisory reactions.
Sparekassen is instructed to revise Sparekassen’s risk assessment in order to ensure that Sparekassen makes a correct assessment of Sparekassen’s inherent risk.
Sparekassen is instructed to prepare sufficient business procedures for risk classification, customer knowledge, sharpened customer knowledge and the obligation to investigate and list.
Sparekassen is ordered to ensure that Sparekassen carries out a risk assessment of customer relationships on the basis of a concrete and documented assessment.
Sparekassen is ordered to identify and obtain sufficient identity information on the real owners of legal entities.
Sparekassen is instructed to assess and, where relevant, obtain information on the purpose and intended nature of business relationships.
Sparekassen is instructed to carry out stricter customer knowledge procedures in the customer relationships where Sparekassen assesses that there is an increased risk of money laundering or terrorist financing.
Sparekassens is ordered to carry out new customer due diligence procedures when a customer’s relevant circumstances change.
Sparekassen is instructed to ensure that Sparekassen is able to monitor foreign transactions, and assess these in relation to Sparekassen’s customer knowledge.
Sparekassen is ordered to ensure that Sparekassen conducts an investigation of suspicious transactions, and keeps documentation of the investigation.
Sparekassen is instructed to prepare a written plan for Sparekassen’s internal control to ensure that Sparekassen carries out an adequate control of Sparekassen’s efforts in the money laundering area.
Sparekassen is ordered to ensure that Sparekassen carries out inspections of Sparekassen’s ongoing customer knowledge procedures as well as the duty to investigate, list and notify.