AS SEB banka (SEB Latvia) and the Latvian Financial Supervisory Authority, Financial and Capital Market Commission (FCMC), have reached an agreement to conclude a supervisory review regarding SEB Latvia’s implementation of the fourth Anti Money Laundering directive (AML4) from 2017 as well as a single case connected to the European Union’s sanction list. SEB will pay an administrative fee.
The review, which was disclosed in SEB’s 2019 Q3 report, has been ongoing since 2017 and has covered SEB Latvia’s compliance with regulatory requirements including the implementation of the AML4 legislation. The agreement refers to alleged shortcomings that on certain limited occasions the client’s beneficial owner was not sufficiently proved or documented. Also, that on certain limited occasions it was not fully ensured that the documentation proving the client’s economic activity have been acquired in sufficient scope and quality. SEB Latvia has worked on an action plan where the alleged shortcomings are addressed. FCMC assesses the risk of SEB Latvia being exploited for money laundering as low. The bank will pay an administrative fee of 672,684 EUR.
Furthermore, after communication with FCMC, SEB Latvia has detected and reported a single case in relation to the European sanction list. The bank had not entered correct information regarding one customer’s direct owner. The customer was a subsidiary to a company that was added to the EU sanctions list after SEB Latvia had onboarded the customer. The connection was not discovered until after payments were carried out by the bank. The payments made were related to tax bills, phone bills and purchase of accounting and directory services. The total incoming payments amounted to 592 EUR and the outgoing payments amounted to 712 EUR. SEB Latvia terminated the relationship with the customer and reported the incident to FCMC as soon as the mistake was detected. SEB Latvia will pay an administrative fee of 1,121,140 EUR.
SEB Latvia commits to take further actions to strengthen the bank’s processes, systems and routines. With this agreement, which is in line with the FCMC’s procedures for regulatory reviews, this review is concluded.