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Swedbank allows lawyer to be questioned over money laundering

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Swedbank allows lawyer to be questioned over money laundering

Swedbank AB (publ) is allowing authorities to question the lawyer who prepared its internal reports relating to money laundering allegations, and appointed a permanent chief compliance officer.

The Swedish bank said Sept. 17 that its board decided to meet the request of Swedish Economic Crime Authority to waive the attorney-client privilege in relation to lawyer Erling Grimstad's work for the lender.

The board also made Ingrid Harbo permanent chief compliance officer. Harbo, who will continue to be co-opted to the group executive committee, was named acting head of compliance in April.

In its response to questions from Swedish and Estonian regulators investigating its alleged involvement in money laundering, Swedbank reiterated that its "anti-money laundering work had, and still has, certain shortcomings" and that it "has not allocated sufficient resources and competence to adequately manage the risk of money laundering by clients and third parties" in the past.

The Swedish bank also said that many of the observations made by the financial regulators were in line with its own conclusions.

"The division of responsibilities within the bank has not been clear enough, and the bank has not always complied with internal policies," the bank said. "Know Your Customer and risk assessment are areas where Swedbank has had, and still has, shortcomings." Swedbank noted that this applies to both its Swedish and Estonian operations.

The lender added that based on the insights, it is working hard to ensure regulatory compliance going forward. Law firm Clifford Chance, which the bank hired earlier in 2019 to carry out an internal probe into its historical shortcomings in combating financial crimes, is expected to conclude its probe in early 2020, the bank added.

Additionally, the bank's new division, called Anti Financial Crime, has been working on identifying historical faults in combating financial crime and on developing the lender's ability to prevent such crimes since April.

Swedbank said it will include more details on its efforts to combat money laundering and other financial crimes in its interim report, which will be published Oct. 23.