Nordea criticises new money laundering law: “Good but not enough”

Nordea wants to see completely new opportunities to coordinate transaction data with other banks. Only then will entire criminal networks get caught in the net. This is what Nordea's strategic adviser Johanna Lybeck Lilja claims, and who is now trying to get the EU to ease the regulations.

Money laundering is on everyone's minds - both in business and government. The financial industry's long standing problem area has now even had its own well-attended event: “The Money Laundering Day”, arranged by Hexanova.  Police, prosecutors, politicians and financiers took turns to take to the stage at the North Latin Conference Centre. Many agreed that the government's bill last week, which includes the abolition of secrecy between the judiciary and banks, is a big step forward. Not the least optimistic was the Minister of Finance Max Elger himself, the person who submitted the proposal to Parliament.

“If we can fight money laundering, we can also remove the money from organised crime and thereby make Sweden a better country,” declared Max Elger.

But one participant challenged the consensus: Johanna Lybeck Lilja, until 2014 State Secretary at the Ministry of Finance and then strategic advisor at Nordea.

“Good but not enough,” was her review of the easing of confidentiality requirements.

Johanna Lybeck Lilja’s main objection is that the bill does not provide strengthened opportunities for banks to share information about suspected money laundering. In the future, banks will only be able to share information concerning the same customer and the same transaction.

Co-ordinating large amounts of data would, according to her, give a much more comprehensive picture. Quite often, criminal organisations use many different banks and financial institutions to spread the risk of discovery.

“At Nordea alone, just over 1,600 people work to stop financial crime. The financial police have about 40. This limits the number of cases we can work with in the co-operation body Samlit to 20-25 per year.”

The message from Max Elger and the Ministry of Finance is that Sweden alone cannot change the requirements. What would put an end to this is the EU's privacy rules. Together with, among others, the Dutch bank ING, Nordea has launched a campaign with a view to changing legislation throughout the Union.

A recent statement from the European Commission has raised Nordea’s hopes. When asked by the Danish Government, the European Commission replied that the restriction on customer and  transaction data does not need to be taken literally - several customers could also be included.

Others also take the same line as Johanna Lybeck Lilja. One of these is Christian Wandt at the British consultancy PA Consulting, which provides advice to several Swedish banks.

“By comparing large amounts of transaction data, banks would be able to quickly detect and freeze criminal assets. Now it often takes six months before a report is made and then the money can be gone”, says Christian Lynne Wandt, who previously worked in both the police and the Swedish Financial Supervisory Authority.