Nordea, one of Finland's largest banks, has failed to collect sufficient information about corporate customers who are at high risk of evading economic sanctions imposed on Russia.
That is the main finding from an inspection report by the Financial Supervisory Authority (Fiva) published on Friday by the Finnish news agency STT, which received a public version of the report through an information request to Fiva.
It focuses on the Finnish division of Nordea, the Nordic region’s biggest financial group.
The report, completed in late October, reveals several shortcomings in the bank's data collection procedures aimed at preventing the circumvention of sanctions on Russian entities.
According to Fiva, the most significant problem was that Nordea did not have up-to-date information on all board members and owners of high-risk companies.
For several years, Nordea failed to take into account changes made to the Finnish Patent and Registration Office's (PRH) data regarding boards and beneficiaries of companies, the report says.
Money-laundering settlement last year
In addition, the report noted that Nordea had not obtained enough information about its corporate customers operating in countries with an increased risk of sanctions evasion.
Nordea describes the findings of the Fiva inspection as "useful". Sakari Wuolijoki, the bank's General Counsel, Large Corporates & Institutions for Finland, told STT later on Friday that Nordea was surprised by how significant Fiva considered its findings.
"Our understanding has been that we have had very effective systems for preventing and identifying the circumvention of economic sanctions," Wuolijoki told the news agency.
In his view, it is good that Nordea does not retrieve information on company decision-makers and owners directly from the trade register, but instead updates it manually. According to Wuolijoki, the trade register often contains incomplete information.
This is not the first time that Nordea has been found to be lax in its handling of financial matters related to Russia.
Last year, Nordea paid a US financial regulator 35 million dollars to settle a case over its failure to properly monitor money-laundering activities in 2008-19, involving the transfer of tens of billions of euros in Russian and Azerbaijani funds.
12:55: Added Nordea's response.
