The penalty
New York's Department of Financial Services announced on October 15 that Skandinaviska Enskilda Banken AB, the Swedish bank known as SEB, and its New York branch will pay a $33 million penalty over failures in their and anti-money-laundering program [1].
The department said its investigation followed the 2016 Panama Papers leak, which exposed financial institutions' links to the law firm Mossack Fonseca. The terms are set out in a published on the department's website [1].
What the department found
The department described critical gaps in SEB's program, including inadequate customer due diligence and no effective strategy for reducing the money-laundering risk posed by high-risk clients [1].
It said the bank did not adequately check high-risk correspondent banking partners, including foreign institutions; correspondent banking is when one bank provides accounts and payment services to another. The department also cited deficient client files, miscalculated money-laundering risk ratings and procedures for correspondent relationships that were not kept up to date [1].
At SEB's subsidiaries in Estonia, Latvia and Lithuania, the department said transaction monitoring was deficient in its ability to detect and block suspicious activity, and backlogs let transactions go without timely review for money-laundering and sanctions risk [1].
Acting Superintendent Kaitlin Asrow said the department will hold accountable entities that fail to meet those standards [1].
What remains uncertain
The press release does not say whether SEB admitted or denied the findings, and it does not describe any remediation requirements; those details, if any, are in the .