COPENHAGEN (Reuters) - Denmark’s Financial Services Authority plans tougher scrutiny of how banks assess the risk of money laundering when a new law to combat the crime comes into effect this month, the regulator told Reuters.
The FSA will “fairly quickly” check whether banks have set up the more in-depth risk assessments of customers, products, services, transactions and geographical areas that the new law orders them to, deputy Director General Thomas Brenoe said.
Banks operating in Denmark, including market leader Danske Bank (DANSKE.CO) and Stockholm-based Nordea (NDA.ST), have boosted staff levels at anti-money-laundering (AML) units in preparation for the legislation.
“Normally when we’ve done inspections we’ve looked at the banks’ AML efforts from A to Z, but we just might do it differently this time around and start by checking their risk assessments,” Brenoe said in a telephone interview.
The FSA will most thoroughly examine whether each bank has factored in the risks that apply specifically to it, Brenoe said.
“Worst case would be if a compliance lawyer has just written down some sort of standard risk assessment, altogether detached from the business, just to comply with the law,” he added.
Danske Bank said it focused extensively on combating money laundering but added it could not yet comment in-depth on its efforts.
“The whole AML-field has great focus in Danske Bank and we’re continuously adapting the number of employees to the area as needed,” a spokesman for the bank said.
“We can confirm that we in Nordea have manned up significantly within both AML and compliance over the last couple of years,” a spokesman for that bank said, declining to elaborate.
The Danish government aims to raise the maximum penalty for money laundering to eight years in prison from six years currently, Justice Minister Soren Pape Poulsen told lawmakers on in April. His proposal will be discussed in parliament after the summer break.
Reporting by Teis Jensen, editing by Terje Solsvik and Jon Boyle