For Concealing Information About the Panama Papers, the United States Fines a Swedish Bank $50 Million
The Swedish bank and its New York subsidiary agreed to the penalty to settle final U.S. probe tied to money laundering case, officials say.
A Swedbank AB bank branch in Stockholm, Sweden, on Thursday, Jan. 27, 2022. Swedbank will be reporting earnings on Feb. 2. Photographer: Mikael Sjoberg/Bloomberg
New York state regulators fined Swedish bank Swedbank $50 million for intentionally withholding critical information tied to the 2016 Panama Papers scandal. The New York State Department of Financial Services (DFS) found that the bank deliberately obscured its ties to high-risk offshore entities and excluded its Baltic subsidiaries from official inquiries in 2016 and 2018 to avoid exposing cross-border money laundering risks.
Swedbank Fined $50 Million by New York Authorities Over Panama Papers Revelations
Swedbank has agreed to pay a $50 million fine to New York’s state financial regulator to settle a money laundering case tied to the Panama Papers. The Swedish group reached the settlement with the New York State Department of Financial Services (DFS), which first launched the investigation in 2019. The probe was into the bank’s anti-money laundering and counterterrorism financing controls, and its disclosures to regulators between 2007 and 2019, according to a statement by Swedbank.
The DFS had accused Swedbank of withholding information and misleading investigators during the probe into its ties with the Panamanian law firm, Mossack Fonseca. The Panama Papers, a 2016 cross-border journalistic expose led by ICIJ and Suddeutsche Zeitung, was based on a huge trove of leaked Mossack Fonseca documents. Among those documents was proof that customers of Swedbank’s Estonia subsidiary used Mossack Fonseca as a registered agent.
Three years later, journalists from ICIJ’s Swedish partner SVT revealed that Swedbank may have withheld information from U.S. authorities over suspicious financial transactions, contrary to what the bank had claimed. Following the 2016 publication of the Panama Papers, DFS made two information requests to Swedbank asking about its relationship with Mossack Fonseca, related banks, institutions and individuals, the recent statement said.
Authorities found that the bank failed to report on such relationships, failed to acknowledge the existence of European regulatory inquiries and withheld information relating to its subsidiaries in Latvia, Lithuania, and Estonia. “Critically, the leak shed light on the failure of global financial institutions to follow legal requirements designed to ensure that their customers are not engaged in or facilitating fraud, money laundering, or other criminal acts,” the consent order reads.
