Swedbank Cleared of Allegations

Swedbank Cleared of Money Laundering Allegations

After years of scrutiny and investigation, Swedbank has been cleared of money laundering accusations by Estonian prosecutors. The Swedish bank was under intense investigation due to governance deficiencies in its Baltic subsidiaries relating to anti-money laundering measures. This probe was triggered by a 2019 report from a Swedish TV show, suggesting that billions of dollars of potentially illicit funds had flowed through Swedbank's Estonian branch.

Closure of Investigation

The Estonian State Prosecutor's Office has concluded that there was no criminal activity involving money laundering within Swedbank's Estonian subsidiary between 2014 and 2016. Consequently, the investigation has been closed, providing relief to the bank and its stakeholders. Tomas Hedberg, who heads a special task force at Swedbank, expressed satisfaction with the closure, stating, "With the decision of the prosecutor in Estonia, we can leave yet another investigation of historical shortcomings behind us."

Past Penalties

Despite this recent development, Swedbank has faced penalties in the past for compliance issues. In 2020, the bank agreed to pay over $3.4 million to the U.S. Treasury Department's Office of Foreign Assets Control to resolve allegations that its subsidiary in Latvia processed transactions that violated U.S. sanctions on Crimea. Furthermore, the Swedish financial regulator FSA imposed a hefty fine of 4 billion Swedish kronor ($387.1 million) on Swedbank in the same year as a result of serious deficiencies in its anti-money laundering measures within the Baltic operations.

This outcome marks a significant milestone for Swedbank as it strives to address past challenges and enhance its compliance framework moving forward.