Nordea blocks 68 accounts in Panama Papers investigation

Nordea has blocked 68 accounts for further analysis after finding suspicious signs in an internal investigation of the bank’s handling of the Panama Papers leaks.

Nordea blocks 68 accounts in Panama Papers investigation
A Nordea office in Stockholm. Photo: Björn Larsson Ask/SvD/TT

The bank announced some of the findings of the probe into whether it adhered to internal rules and external regulations regarding offshore structures at the same time as it gave its interim financial report for the second quarter of 2016.

It said evidence of Nordea employees actively helping clients with tax evasion had not been found by internal investigators, who were assisted by law firm Mannheimer Swartling as well as other Swedish accountants and lawyers.

In April, Nordea was named in The Panama Papers, a huge cross-border journalism collaboration that analysed millions of records held by an international law firm based in Panama. The papers revealed that around 500 banks may have facilitated tax evasion by helping customers to create offshore companies in tax havens through legal firm Mossack Fonseca.

In Nordea’s case, many of the alleged tax deals were said to have been facilitated by the company’s Luxembourg division.

According to the bank however, its internal investigation showed that while Nordea Bank SA in Luxembourg had offered clients administrative services, it did not find anything which proves employees initiated the formation of offshore structures, nor that they proactively assisted clients in avoiding applicable taxes.

The majority of the suspicious signs in the 68 customer files flagged up by the investigation requiring further analysis came from before 2013, meanwhile.

“In according with our policies we are examining these accounts closer to look for reasonable evidence that customers have followed the rules for declaration and taxation, otherwise the accounts will be closed,” the bank wrote in a press release.

In the future, Nordea’s customers can also expect a tighter fiscal policy when it comes to advising clients.

“Nordea will say no to all new corporate structures where the business purpose is unclear,” the press release stated.

The bank also reiterated its promise to cut all ties with the law firm Mossack Fonseca, which it expects to be “completely finished by the end of the year”.

The bank’s investigation showed that Nordea Luxembourg had 129 offshore structure customers either administered by Mossack Fonseca or incorporated in Panama on April 15th, 2016, with a total assets managed amounting to €216 million.

The probe showed that Nordea had failed when it came to demands for increased customer knowledge, required for so-called high-risk customers.

In addition, the investigation also found seven cases where the renewal of Powers of Attorney had not been made in accordance with internal guidelines. However, “all criteria for this to be defined as illegal were likely not met,” the bank said.

Another investigation into Nordea’s overseas activities is also under way at Sweden’s financial supervisory authority, Finansinspektionen. It is expected to be completed before the end of the year.