Danish FSA Finds Flaws in Danske Bank's Sanctions Compliance Regime
The Danish Financial Supervisory Authority found that dealing with Danske Bank carries an inherent risk that the bank's customers will breach international sanctions, due in large part to the bank's lack of due diligence procedures, the Danish FSA said Nov. 16. The Danish FSA said its anti-money laundering inspection of the bank found serious holes in the bank's procedures.
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The report said the bank's employees responsible for due diligence data and transaction monitoring "receive no training." It said "the four-eyes principle is not applied in connection with the screening of customers, the organisation of controls of manual processes for escalation as well as the organisational embedding of the Sanctions and Embargo Team in Group Compliance." The FSA also cited a risk that sanctions might not be detected "because the bank does not have procedures in place for cooperation, including the exchange of information, between the units responsible for sanctions screening, customer due diligence data and transaction monitoring."
"We acknowledge the three risk information observations from the Danish FSA’s inspection in 2020," Danske said in response. "We are already addressing these findings through the completed development of a set of comprehensive actions that we will track closely through to completion. While we have invested in multiple control enhancements to our sanctions screening and sanctions risk management processes in recent years, we agree that there is remaining work to do."