The Governors of the Nordic-Baltic Central Banks (and, where applicable, the financial supervisors), the Danmarks Nationalbank (Nationalbanken), the Danish Financial Supervisory Authority (Finanstilsynet), the Bank of Estonia (Eesti Pank), the Financial Supervisory Authority (Finantsinspektsioon), the Bank of Finland (Suomen Pankki), Finnish Financial Supervisory Authority (Finanssivalvonta), the Central Bank of Iceland (Seðlabanki Íslands), the Financial Supervisory Authority of Iceland (Fjármálaeftirlitið), the Bank of Latvia (Latvijas Banka), the Bank of Lithuania (Lietuvos bankas), the Central Bank of Norway (Norges Bank), the Financial Supervisory Authority of Norway (Finanstilsynet), Sveriges Riksbank (Riksbanken), the Swedish Financial Supervisory Authority (Finansinspektionen), have all requested the technical assistance from the International Monetary Fund (IMF) to strengthen the effectiveness of Anti-Money Laundering/Countering the Financing of Terrorism Frameworks.
The request has its origin in various international money laundering banking scandals (ABLV, Danske Bank, Nordea, Swedbank), involving cross-border payments by non-residents that exposed financial integrity risks in the financial sector of the region, attracting international scrutiny on the level of non-resident Money Laundering/Terrorist Financing ML/TF risks and highlighting the vulnerabilities related to AML/CFT risk-based supervision of banks in the region.
The IMF’s key findings and recommendations include:
- ensuring accurate beneficial ownership information,
- enhancing AML/CFT risk-based supervision and finetuning the inspections of banks,
- ensuring adequate resources and improving the capabilities of supervisors, in particular, to banks and fintech operators,
- enhancing understanding of ML/TF risks arising from non-resident and cross-border financial activities, including monitoring of cross-border payments,
- consolidating the fintech sector for countries where it is mature,
- stepping up cross border supervision, including cooperation with regional international authorities, and,
- strengthening regulatory frameworks for crypto asset service providers (CASPs).
Most of all, however, is the need to further leverage positive cooperation and information-sharing practices through the establishment of joint AML/CFT supervisory strategies for the highest risk cross-border bank and continue efforts to ensure strong coordination between prudential and AML/CFT supervisors.t
The full report can be accessed here.