Money remittance provider Moneygram must resolve anti-money laundering deficiencies

Finansinspektionen reviewed the compliance with the anti-money laundering regulations of the four largest money remittance providers in Sweden. Special focus was placed on the risk assessment of operations in Sweden and the support and training these firms provide their agents.

The background for this is that money remittance providers run a high risk of being exposed to money laundering and terrorist financing. Their agents are also often in areas that the Swedish Policy Authority classifies as "exposed" or "especially exposed", where there is a greater risk for this type of crime.

The deficiencies FI identifies in the injunction decision are related to Moneygram's general risk assessment. The firm has not assessed the risks associated with cash transactions. There is also no analysis of the firm's customers nor an assessment of the risks associated with these customers. Furthermore, the firm has not assessed the risks associated with its use of agents as a distribution channel.

"Not making an assessment of the risk associated with cash transactions when the operations are located in an exposed area can result in the firm running a high risk of being used by people who want to launder money. It is necessary for the firm to resolve these deficiencies now," says Petra Bonderud, Deputy Director for the Operational Risks department at FI.

FI has previously dismissed three of the four investigations since the firms resolved or prepared plans that FI assesses to be sufficient for resolving the deficiencies.

Moneygram has said that it will resolve its deficiencies, but not in a sufficiently clear manner. The firm has only specified that some of the deficiencies will be resolved in the fourth quarter of this year. Finansinspektionen has therefore decided to issue an injunction to the firm to resolve its deficiencies. It shall have taken remedial action no later than by the end of the year.