Nordea Bank Agrees to $35 Million Fine Over AFC Failures Linked to Panama Papers Scandal

Nordea Bank, the Finland-listed financial institution, found itself back in the spotlight for unfavorable reasons on Tuesday, agreeing to pay a $35 million civil fine to settle anti-financial crime (AFC) charges brought by a top New York regulator. The settlement follows accusations that the bank failed to adequately police money laundering and other illicit activities, including issues highlighted in the notorious Panama Papers scandal.

Adrienne Harris, New York State’s financial services superintendent, criticized Nordea for its inadequate due diligence concerning customers and high-risk banking partners. Harris pointed out that even Nordea had acknowledged its oversight faced a “critical” risk of failure.

Jamie Graham, Nordea’s chief compliance officer, expressed the bank's satisfaction with the settlement and conceded that the Helsinki-based bank had historically “underestimated the complexity of preventing financial crime and the resources needed for that purpose.”

According to New York regulators, Nordea was tied to billions of dollars in high-risk transactions between 2008 and 2019. These transactions involved its Vesterport branch in Denmark, implicating the bank in notorious schemes like the Russian Laundromat and Azerbaijani Laundromat.

A consent order indicated that Nordea had “acknowledged its shortcomings” in implementing effective anti-money laundering procedures, particularly at its former branches in Denmark, Latvia, Lithuania, and Estonia, as well as in its correspondent banking and customer relationships.

The Panama Papers, released in 2016, exposed thousands of offshore accounts and entities in tax havens, linked to high-profile individuals such as Ukrainian President Volodymyr Zelenskiy and Argentine soccer star Lionel Messi. The revelations were based on the leak of approximately 11.5 million documents from the now-defunct Panamanian law firm Mossack Fonseca.

Nordea confirmed that it will record the $35 million fine as a charge in its third-quarter financial results.

By fLEXI tEAM