Money Laundering

Trust in the financial system is at the very core of our modern society. If banks and other financial institutions are used as tools to legitimate criminal activity through money laundering this trust will quickly erode. In recent years major banks all over the world, including major Scandinavian banks, have been implicated in money laundering scandals. We expect all financial institutions to follow international rules and the recommendations from the Financial Action Task Force on Anti-Money Laundering (AML). We will cooperate with other investors, to improve the AML systems in banks we are invested.



Swedbank

Swedbank is currently on Storebrand's Observation List, a status which represents ownership restrictions and intensive engagement activities. The company is under scrutiny for its alleged role in Money Laundering. Investigative reporters have analyzed leaked documents on transactions between Danske Bank and Swedbank accounts in the Baltics between 2007-2015, identifying suspicious transactions linked to 50 Swedbank customers totaling SEK 40 bn, and “high-risk non-resident” flows in Estonia totaling EUR 135 bn. In 2018, following the Danske Bank scandal, Swedbank conducted an internal investigation into SEK 95 bn in transactions, and expressed confidence in its Anti-Money Laundering (AML) and Know-Your-Customer (KYC) practices.

Swedbank has shown a willingness to address its shortcomings by overhauling its senior management, creating an Anti-Financial Crime unit and cooperating with the authorities, in particular by its most recent decision to waive attorney-client privilege. Despite these developments, there is still uncertainty regarding the timelines and effectiveness of Swedbank’s newly implemented AML systems and processes. The company is in the same sector and in the same region as Storebrand, and we believe this will facilitate cooperation and effective engagement. We aim to have extensive contact with Swedbank on different levels as long as the company is on the Observation List.

We have placed Swedbank AB on the observation list with the following expectations to be fulfilled before a full inclusion is to be considered:

  • Implementation of a trustworthy and verified system for compliance with AML and Know Your Customer (KYC) frameworks
  • Complete closure of non-resident portfolios and enhanced AML routines in high risk countries
  • Conduct a full and independent investigation of the issue
  • Start implementation of recommendations from external and internal investigations
  • Demonstrate that Swedbank’s management and control mechanisms, such as AML governance and whistleblower channels, have improved.
  • No further reports on shortcomings relating to Swedbank’s AML governance for a sustained period of time