By Jonathan Stempel
NEW YORK (Reuters) -Nordea Bank agreed to pay a $35 million civil penalty to settle charges by a leading New York regulator that the Finland-listed bank had failed to prevent money laundering and other criminal activity should be audited, including matters that came to light in the Panama Papers scandal.
New York State Chief Financial Services Officer Adrienne Harris faulted Nordea’s inadequate due diligence on customers and high-risk banking partners, saying even the bank recognized that its supervision had a “critical” risk of failure.
Nordea Chief Compliance Officer Jamie Graham said the Helsinki-based bank was pleased with the settlement and acknowledged that it had historically “underestimated the complexity of preventing financial crime and the resources required to do so.”
New York said Nordea was linked to billions of dollars in risky transactions between 2008 and 2019, including at a branch in Vesterport, Denmark, implicating the bank in schemes known as the Russian Laundromat and Azerbaijani Laundromat.
A consent order said Nordea “acknowledged its shortcomings” in relation to anti-money laundering procedures at its former branch in Denmark, at former branches in Latvia, Lithuania and Estonia, and in its relations with correspondent banks and customers.
The Panama Papers, published in 2016, contain details of thousands of offshore accounts and entities, including tax havens linked to the likes of Ukrainian President Volodymyr Zelenskiy and Argentine football star Lionel Messi.
They were based on the leak of approximately 11.5 million documents from the now defunct Panamanian law firm Mossack Fonseca.
Nordea said it will include the $35 million fine as an expense in its third-quarter results.
