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Here's what we know about the money laundering scandal at Swedbank

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Here's what we know about the money laundering scandal at Swedbank
Media pictured outside Swedbank's Stockholm offices during a police raid on Wednesday. Photo: Lars Pehrson/SvD/TT
09:24 CET+01:00
Explosive allegations that one of Sweden's major banks may have been used for money laundering for a decade have led to the sacking of its CEO and a plunge in share prices. Here's what we know about the Swedbank allegations so far.

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What are the allegations?

Around 40 billion kronor ($4.3 billion) has been transferred through Swedbank by customers who may be involved in money laundering, according to Swedish broadcaster SVT.

The broadcaster asserted that 50 customers who exhibited "clear warning signals" of money laundering transferred around 40 billion kronor between Swedbank and Danske Bank, which itself was involved in a major scandal.

The transactions took place between 2007 and 2015 in the Baltic countries, and include companies without contact information or telephone numbers, many sharing the same UK address. And there are thousands more customers of the bank who have accounts in Estonia, Latvia and Lithuania but are registered overseas, including in tax havens such as the British Virgin islands and Belize.

SVT's original investigation is available to read here.

How do we know this is money laundering?

We don't, yet. Whether the suspicious transactions can be considered as money laundering depends on whether the money originates from criminal activity. Some of the transactions showed money moved from Danske Bank to Swedbank accounts from nine companies linked to tax fraud in Russia, SVT reported.

Among the customers involved in the transactions, SVT named former Ukraine president Viktor Yanukovych, who was convicted of treason earlier this year, and Russian businessman Iskander Makhmudov. Both received millions of kronor through Swedbank transactions.

What was the Danske Bank scandal?

Preliminary charges were brought against Danske Bank last winter after some 200 billion euros, the bulk of which appears to have come from uncertain sources, was channelled through Danske's Estonian branch between 2007 and 2015.

The bank could face heavy fines over the suspected laundering, which is being investigated by authorities in France, Denmark and the US.

Billions of kronor may have been laundered through major Swedish bank
The head office of Swedbank, north of Stockholm. Photo: Janerik Henriksson/TT

How has Swedbank responded?

When the allegations first surfaced, Swedbank did not at first respond directly, but said that the bank worked to combat money laundering.

"We are confident with the systems and processes we have for preventing and preventing money laundering," the bank's head of communications told TT following the SVT report. "When we see signs, we act."

He would not comment on how many cases of suspected money laundering Swedbank had reported to police during the years in question, but said the bank "does not recognize" the list of customers or amounts referred to by SVT.

Swedbank CEO Birgitte Bonnesen had previously said the bank was not open to the same kind of laundering as Danske Bank due to its "completely different approach", including a focus on domestic rather than international customers.

Who is investigating Swedbank?

Since the allegations, multiple probes and investigations have been launched into Swedbank.

February 21st: Sweden's Financial Supervisory Authority (FI) launched an investigation into the lender together with the equivalent authority in Estonia, since many of the suspicious transactions took place in the Baltic states. The authority described the allegations as "very serious".

Swedbank announced that its CEO Birgitte Bonnesen had requested an external investigation into the allegations.

February 27th: The Swedish Economic Crime Authority (EBM) announced that it would be opening a preliminary investigation into Swedbank relating to unauthorized disclosure of insider information.

March 7th: American financier and whistle-blower Bill Browder reported Swedbank to the Swedish police for suspected money laundering.

March 22nd: Swedbank announced the results of the investigation carried out by an external consulting firm, and the board confirmed its "continued confidence" in its CEO, who decided to create a dedicated unit within the bank to deal with financial crime.

March 27th: The New York Department of Financial Services (DFS) announced an investigation into the bank for giving misleading information linked to a Panama law firm which was central in the Panama Papers disclosures.

Watchdog launches probe into Swedbank after money laundering allegations
Swedbank's former CEO Birgitte Bonnesen, pictured, lost her job on Thursday over the allegations. Photo: Tomas Oneborg / SvD / TT

What did the police raid mean?

A police raid took place at the Stockholm offices of Swedbank on March 28th, the Swedish Economic Crime Authority (EBM) confirmed.

Later that day, the authority said it was widening its investigation to include suspected fraud as well as a breach of insider information rules, and that it was looking at a broader time period.

How have politicians reacted?

Following the first allegations, Finance Minister Magdalena Andersson said she did not want to comment on the Swedbank case specifically, but said it was "important that there is trust in our banks", and said there were ongoing discussions at the EU level on possible tightening of anti-money laundering laws.

Prime Minister Stefan Löfven later told the TT news agency that his government will take a hard look at the nation's financial sector in the wake of the allegations. He said that if the money laundering allegations are proven true, it would “undermine confidence in the whole system”.

What will the consequences be for Swedbank?

Swedbank CEO Birgitte Bonnesen was fired at a general meeting between the bank and its shareholders in Thursday. 

Shares in the lender have dropped by around 30 percent in the month since the allegations were first made, and also on Thursday, the Stockholm stock market announced a stop on all trading with Swedbank. This was lifted again shortly before 4pm in the afternoon.

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