Money remittance provider Moneygram must resolve anti-money laundering deficiencies

2022-09-13 | NEWS MONEY LAUNDERING BANK

The foreign money remittance provider Moneygram International SPRL has not had a sufficient scope in the general risk assessment of its operations in Sweden to its assessment of the risk of being used for money laundering or terrorist financing. Therefore, FI has decided to issue an injunction to Moneygram to resolve the deficiencies by 30 December of this year.

Finansinspektionen reviewed the compliance with the anti-money laundering regulations of the four largest money remittance providers in Sweden. Special focus was placed on the risk assessment of operations in Sweden and the support and training these firms provide their agents.

The background for this is that money remittance providers run a high risk of being exposed to money laundering and terrorist financing. Their agents are also often in areas that the Swedish Policy Authority classifies as “exposed” or “especially exposed”, where there is a greater risk for this type of crime.

The deficiencies FI identifies in the injunction decision are related to Moneygram’s general risk assessment. The firm has not assessed the risks associated with cash transactions. There is also no analysis of the firm’s customers nor an assessment of the risks associated with these customers. Furthermore, the firm has not assessed the risks associated with its use of agents as a distribution channel.

“Not making an assessment of the risk associated with cash transactions when the operations are located in an exposed area can result in the firm running a high risk of being used by people who want to launder money. It is necessary for the firm to resolve these deficiencies now,” says Petra Bonderud, Deputy Director for the Operational Risks department at FI.

FI has previously dismissed three of the four investigations since the firms resolved or prepared plans that FI assesses to be sufficient for resolving the deficiencies.

Moneygram has said that it will resolve its deficiencies, but not in a sufficiently clear manner. The firm has only specified that some of the deficiencies will be resolved in the fourth quarter of this year. Finansinspektionen has therefore decided to issue an injunction to the firm to resolve its deficiencies. It shall have taken remedial action no later than by the end of the year.

Moneygram receives injunction to take remedial action

2022-09-13 | SANCTIONS MONEY LAUNDERING BANK

Moneygram International SPRL has not applied a sufficient scope to its assessment of the risks of its operations in Sweden being used for money laundering. Moneygram must resolve these deficiencies no later than 30 December 2022.

Moneygram International SPRL is a foreign payment institution that conducts business in Sweden through agents that carry out money remittances. In conjunction with an investigation into the institution’s work to combat money laundering and terrorist financing, Finansinspektionen identified deficiencies in the institution’s general risk assessment.

Moneygram has not assessed the risks associated with its cash transactions. The institution’s risk assessment also does not contain an analysis of its customers and an assessment of the risks associated with these customers. Furthermore, the institution has not assessed the risk associated with its use of agents as a distribution channel.

Moneygram has said that it will resolve the deficiencies but has not explained how or when; instead, it has only vaguely referred to resolving some of the identified deficiencies during the fourth quarter of this year. Given these conditions, Finansinspektionen cannot anticipate that the deficiencies will be resolved.

Finansinspektionen is therefore issuing Moneygram an injunction that it must resolve no later than 30 December 2022 the deficiencies that FI identified and update the institution’s general risk assessment. MoneyGram must also report in writing no later than 31 January 2021 that it has implemented the measures as ordered by FI and how this has resulted in compliance with the injunction.

FI also investigated other parts of Moneygram’s work to combat money laundering and terrorist financing. Here, the institution took measures during the course of the investigation or presented action plans that FI can approve. Therefore, FI sees no cause for issuing an injunction in these areas.