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Nordea Bank, one of Finland’s largest financial institutions, has reached a $35 million settlement with New York’s financial services regulator over allegations of notable compliance failures. The settlement addresses issues related to inadequate diligence concerning high-risk correspondent banking partners and follows revelations from the 2016 Panama Papers leak.
The settlement, announced by Adrienne Harris, New York’s financial services superintendent, resolves charges that Nordea Bank was involved in facilitating the creation of tax-sheltered companies through offshore accounts. The Panama Papers, which exposed extensive use of offshore tax havens, highlighted Nordea’s role in helping hundreds of customers establish these entities.
The regulatory scrutiny also extended to a former Nordea branch in Vesterport, Denmark. Harris indicated that activities at this branch further implicated the bank in the movement of illegal funds, contributing to the severity of the compliance issues.
The $35 million settlement is part of a broader crackdown on financial institutions that fail to adhere to anti-money laundering regulations and proper due diligence practices. The resolution of these charges comes as financial regulators worldwide intensify their efforts to address gaps in compliance and enforcement that allow for financial misconduct and illicit activities.
Nordea Bank’s agreement to pay the settlement underscores the importance of rigorous compliance measures in the banking sector, especially regarding high-risk banking relationships and offshore financial activities. The case serves as a reminder to financial institutions to bolster their anti-money laundering frameworks and ensure robust oversight of correspondent banking relationships.
In response to the settlement, Nordea Bank has pledged to enhance its compliance practices and strengthen its internal controls to prevent future regulatory breaches.