Statement on inspection in Skandinaviska Enskilda Banken, Denmark, branch of Skandinaviska Enskilda Banken AB (publ.), Sweden
On 4 and 5 March 2021, the Danish Financial Supervisory Authority inspected Skandinaviska Enskilda Banken, Denmark, a branch of Skandinaviska Enskilda Banken AB (publ.), Sweden (SEB or the branch). The inspection was an investigation of the money laundering area. The inspection included the company’s risk assessment, policies, procedures and internal controls. In addition, the inspection included the company’s customer knowledge procedures and the company’s monitoring of customers. Finally, the inspection included the company’s inspection, listing, notification and storage obligations.
Risk assessment and summary
Skandinaviska Enskilda Banken, Denmark, is a branch of Skandinaviska Enskilda Banken AB (publ.), Headquartered in Sweden. The Danish branch was established in Denmark in 1997, and it describes itself as one of the country’s leading commercial and investment banks. In its function as a “relationship bank”, the branch offers products to larger companies and institutions. SEB’s Danish branch also offers asset management to institutional clients and private assets, including private banking. In addition, the customer portfolio consists of customers who commute between Denmark and Sweden (bridge account) as well as pension customers to a limited extent.
The Danish Financial Supervisory Authority assesses that the branch’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. The Danish FSA’s assessment is i.a. based on branch size, business model, products and customers.
On the one hand, the branch has only a limited number of customers. On the other hand, the customers are to a large extent large financial institutions, which the Danish FSA considers to be high-risk customers. In addition, the branch offers the usual banking products, which by nature have a high risk.
On the basis of the material submitted by the branch as well as the information that the Danish Financial Supervisory Authority received during the inspection, there are a number of areas that give rise to supervisory reactions.
The branch has been instructed to revise its risk assessment. The risk assessment must be based on the branch’s business model and reflect all the branch’s risk factors.
The branch has also been instructed to draw up a policy in the area of money laundering, based on the risk assessment and setting the branch’s strategic objectives in the field of money laundering, so as to counteract the risks of money laundering and terrorist financing.
The branch has been ordered to secure business processes where there are currently insufficient business processes. The branch’s business procedures must include all relevant risk areas in the branch.
The branch has been instructed to establish sufficient internal controls so that security is incorporated against errors and against an employee being able to abuse his position in connection with the processing of alarms from the monitoring system.
The branch has been instructed to establish an independent control in the area of money laundering, in relation to the duty of investigation, listing, notification and storage.
The branch has been instructed to ensure that in connection with the establishment of customer relationships, it obtains sufficient customer knowledge information in accordance with the Money Laundering Act.
The branch has been instructed to evaluate and verify the information obtained in connection with the establishment of the customer relationship.
The branch has been instructed to carry out updating and updating of customer knowledge information for the customer groups observed during the inspection in accordance with the Money Laundering Act.
The branch has been instructed to revise the risk classification of the international bank customers, so that customers are risk classified on the basis of a concrete and documented assessment, and that the branch can adjust this risk classification for the individual customer when needed.
The branch has also been instructed to ensure that the branch’s monitoring system covers and can apply changes in customer behavior and deviations from the branch’s knowledge of the customer to generate alarms.
The branch has been instructed to ensure that it conducts adequate investigations into alarms from the branch’s surveillance.
Finally, the branch has been ordered to record and store the results of investigations into suspicious transactions carried out in accordance with the duty to investigate.