Sweden fined a fintech company 500 million krona ($50 million) for failing to assess how its services could be abused by money launderers or terrorist financiers.
Klarna Bank AB, a major buy-now-pay-later e-commerce provider, was fined after an audit found “significant deficiencies” in the company’s risk-related operations, Finansinspektionen (FI), the country’s financial regulator said Wednesday.
“Our investigation shows that Klarna has not followed the requirements on, among other things, a general risk assessment and procedures and guidelines for due diligence measures,” said FI Director General Daniel Barr. “There are therefore grounds on which to intervene against the bank.”
Specifically, Klarna was in violation of failing to assess how its services could be exploited by customers for money laundering or terrorist financing purposes. The company also neglected to implement any procedural measures in its risk management models.
Despite the sizable administrative fine, FI regulators determined that the violations did not warrant stripping Klarna of its banking license.
In a statement of its own, Klarna said that “it is important to emphasize that the decision applies precisely to rule interpretation and application and not to actual cases of money laundering.”
The company further commented on the complexities behind the country’s anti-money laundering laws, highlighting that “all other major banks have received reprimands within the framework of the money laundering regulations.”
Authorities were, however, unsympathetic to such views, and stressed the importance behind maintaining proper safeguards against financial crime activity.
“The anti-money laundering regulations must be followed. It is important to counteract the risk that the firm's operations could be used by criminals,” Barr said.
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