Danish Watchdog Says Financial Institutions Fall Short on Anti-Money Laundering

(Bloomberg) -- Denmark’s financial institutions aren’t doing enough to ensure they are not used to launder money or finance terrorism, an extensive review by the country’s supervisor found.

Executives are aware of the risks but don’t know in practice what exactly they need to do, the Danish Financial Supervisory Authority says, after conducting 55 inspections over the course of more than a year that looked at staffing and systems put in place to counter financial crime.

The FSA, which supervises 1,500 firms, said it routinely cited companies for failing to conduct satisfactory risk assessments, scrutinize their correspondent banks, and adopt adequate policies and procedures, including those needed to comply with know-your-customer requirements, a key element in defenses against criminals.

The Copenhagen-based agency says it is conducting another 35 inspections this year, as Denmark responds to the crisis enveloping its largest lender. Danske Bank A/S last year became the epicenter of Europe’s biggest money laundering scandal, after discovering that much of $230 billion in payments run through an Estonian unit were suspicious.

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