The information that Uppdrag Granskning presents in its programme does not contain any news for the bank. We have showed how our flows have looked historically, and we also have a continuous dialogue with the financial supervisory authorities in all the markets where we operate. In the autumn of 2019, we published historical transactional data regarding so called non-resident customers and low-transparency customers in SEB in Estonia, which is the country where SEB historically has had the most such customers. That data shows that, at the beginning of the 2000s, there were customer relationships where a large part of the analysed historical payment flows does not meet today’s standards regarding transparency and/or linkage to an authentic business activity. It also shows that SEB from 2006 and onwards has worked in a structured and dedicated manner to reduce the risks of being exploited for money laundering in the Baltics, and that the bank’s risk exposure to these customers has been low and declining over time.
This has also been noted by the Swedish Financial Supervisory Authority as well as by the financial supervisory authorities in the Baltic countries, which recently concluded their supervisory reviews of SEB’s protection against money laundering in the Baltics. Furthermore, both the supervisory authorities and SEB have emphasised that the whole financial system, including SEB, needs to continue to improve its work to counter this kind of crime.
Our intention has been to, at any given moment in time, describe our work to counter money laundering in a correct and fact-based way. Financial crime, however, is by nature complex. Criminal activity that can seem obvious in retrospect can be difficult to detect at the time it occurred. We work continuously to ensure that SEB’s customers live up to the bank’s requirements and we have during the years also continuously acted on the warning signals we have received and on different money-laundering revelations as they have become publicly known.
Money laundering poses a threat to the entire financial system, but also to democracy and society at large. To counter money laundering and other financial crime is of highest priority for SEB, and has been for a long time. As long as there is criminality in the world, criminals will try to make illegal money available for consumption and investments. Here, SEB has a big responsibility that we take very seriously. There are no perfect systems, but we do everything we can to prevent, detect and report suspicious activity. We also report continuously to the financial intelligence units in all countries where we do business. Over the last ten years, SEB in the Baltic countries has reported more than 7,000 SARs to the financial intelligence units, and every day we are subject to new attempts from criminals who seek to exploit us. That is why we constantly work on strengthening the bank’s abilities.
Questions and answers regarding the programme
What is Uppdrag Granskning’s programme about?
Uppdrag Granskning reports about an international leak of SARs, which are the suspicious activity reports that banks send to financial intelligence units, in which SEB is one of the banks mentioned. The information included in the programme does not contain any news for the bank. We have showed how our flows have looked historically, both publicly and in the dialogue with our financial supervisory authorities.
What does the leak contain?
The leak regards so-called suspicious activity reports that banks send every day to financial intelligence units around the world, as part of their work to counter money laundering or other forms of financial crime. This leak is about SARs to the US authority FinCen.
It is important to keep in mind that the transactions mentioned in the leak consist of activities that banks have identified as suspicious, and therefore reported to the financial intelligence unit, which is in line with how the banks should act. Furthermore, the leak does not necessarily give the full picture, in part because it only provides a portion of the SARs that have been reported to the US authority. In addition, the leak does not show whether the banks mentioned also have sent SARs to the financial intelligence units in their own countries, and it does not show what further measures banks and authorities have taken.
We act on the warning signals we receive, through suspicious activity report, in the close dialogue we have with police and authorities, and by ending customer relationships. In the last 10 years, SEB in the Baltics has filed more than 7,000 suspicious activity reports with the financial intelligence units.
You can read SEB’s previous comment from 21 September 2020 about the leaked SARs at www.sebgroup.com
What are suspicious activity reports and why are they confidential?
Suspicious activity reports, or SARs, are an important part of how police and authorities gather evidence of potential financial crime. Like other banks, we report thousands of SARs globally every year. That is one part of our daily work to counter financial crime.
The reports are sent to authorities by banks and other companies. They give, among other things, authorities a possibility to forfeit assets and bring criminals to justice. Banks are therefore not allowed to share information about suspicious activity reports as it is police intelligence material.
The US authority FinCEN has on its website stated that the unauthorized disclosure of SARs is a crime that can impact the national security of the US, compromise law enforcement investigations, and threaten the safety and security of the institutions and individuals who file such reports.
At the same time, it is a problem from a law enforcement perspective that banks are not allowed to share information with each other on suspicious activity, SEB is therefore working to increase cooperation between banks, authorities and countries to make it easier to share information about suspicious activity.
Why have you not wanted to access the information that Uppdrag Granskning has?
Uppdrag Granskning refers to a leak of suspicious activity reports that banks generally create when they detect a transaction or a behaviour that could constitute suspected money laundering or other forms of financial crime. The reports are thereby police intelligence material that other banks should not access or comment on.
What is your view on the companies and transactions that are mentioned in the programme?
The information included in suspicious activity reports is police intelligence that we should not access or comment on. Regarding the transactions that are mentioned in the programme, of SEK 8.2 billion, we note that SEB already during the autumn of 2019 published historical transactional data of EUR 25,8 billion in total (which is about SEK 260 billion) of so-called low-transparency customers in Estonia from 2005 to 2018.
Why has Johan Torgeby declined to be interviewed?
Swedish television SVT has interviewed Johan Torgeby four times since the beginning of 2020. In the interview from 29 January, which is published on svt.se (in Swedish), Johan Torgeby answers questions about SEB’s work to counter money laundering and about the warning signals the bank gets and how we act on them.
In addition, SEB’s Head of Group Compliance and the bank’s Head of Corporate Communication did an interview with Uppdrag Granskning already in November 2019. We have also answered additional questions from Uppdrag Granskning.
We are of the opinion that Uppdrag Granskning’s description of SEB’s history and our statements is incorrect. The angles that Uppdrag Granskning uses are not objective and do not take into consideration the answers that SEB has provided the programme with. SEB has thoroughly answered the questions that Uppdrag Granskning has asked — and we choose to answer in the way that we find most suitable.
With regard to the leaked reports, we should not access or comment on the information contained therein as they are police intelligence material.
Our intention is to be open, transparent and correct in our communication. The bank’s spokespersons are often seen in the media, and we do our best to answer any questions we get from journalists, both on money laundering and other topics.
Why is Uppdrag Granskning yet again highlighting your CEO’s comment about red flags?
We notice that Uppdrag Granskning maintains a misinterpretation of a comment that SEB’s CEO made in the autumn of 2018, and that they do not consider our repeated remarks about factual errors. We have on numerous occasions informed Uppdrag Granskning that the quote has been taken out of context, and that Uppdrag Granskning as a result conveys an incorrect picture.
When Johan Torgeby spoke about red flags at a presentation of the bank’s quarterly report for the third quarter of 2018, it was about two things:
The first referred to potential comparisons with what had just been reported about Danske Bank’s operations in Estonia. We could not in such a comparison see that we, based on the external and internal analyses that had been conducted of SEB’s operations in the Baltics, have had a business strategy to attract customers with high risk of money laundering. The proportion of high-risk customers has been limited and has decreased over the years through active decisions made by the bank. We could also see that SEB has continuously acted on the signals received from, for example, authorities and that the bank has reported suspected money laundering to the financial intelligence units. We still believe that this is a correct description.
The other referred to suspicious transaction activity, where we get a large amount of warning signals every day that we look closer at and when necessary, take measures.
Johan Torgeby also explains this in interviews, among them the one he did with SVT on 29 January 2020, which is available on svt.se (in Swedish).
Below is the full quote from October 2018, with the parts that Uppdrag Granskning has chosen not to include in its programme marked in bold:
”… In addition to what we do ourselves we have external authorities and our internal investigation (internal audit). In Estonia, we have since 2008 conducted 21 money laundering related reviews with the Estonian Financial Supervisory Authority and nine independent internal reviews and we have no red flags. In addition, we also have high ambitions when it comes to using new technology. We handle millions of transactions all the time and it’s not possible for the human eye to process that much information. So, with new technology we have something called suspicious trading monitoring, through which we get a plentitude of red flags when you see something improper that can happen. The problem with using technology is that you get what we call false positives – you get a large number of signals that actually was a proper transaction by a proper person. Nonetheless, it’s very important to spend more on this, invest in and improve, especially now when there is so much interesting technology to improve this with.”
Uppdrag Granskning claims that the warnings from Russian central bank governor Andrei Kozlov remained forgotten for 10 years. Is that correct?
No. As we have stated to Uppdrag Granskning, and also in media interviews on several occasions, we took Kozlov’s warnings very seriously. Just days after we received the information from Kozlov, we filed reports with the police. We have also, in our own communication, described how Kozlov’s warnings in 2006 constituted an important part of SEB’s work against money laundering in the Baltic countries. Partly because of them, we could already in 2006 and thereafter identify, report and terminate suspicious customer relationships. This is also confirmed by the historical transactional data that the bank published in the autumn of 2019.
Can SEB guarantee that the bank is not being exploited for money laundering
No, we cannot. No bank can give such guarantees, which we have repeatedly emphasised in our communication around this issue. As long as there is criminality in the world, criminals will regrettably try to get into the financial system. As regulations have been tightened, the abilities of the banking system have improved over time, but there is always more work to be done in this area. There are no perfect systems, but we continuously work to improve our abilities to prevent, detect and report suspicious activity, and that work will never end. We also work to increase cooperation between banks, authorities and countries – with new technology and improved information sharing – in order to strengthen the resilience of all of society against this kind of crime.