Klarna has been fined Skr500 million ($50 million) by Sweden’s Financial Supervisory Authority due to deficiencies in its anti-money laundering practices.
An investigation conducted by the regulator from April 1, 2021, to March 31, 2022, revealed that Klarna violated several critical regulations, particularly those regarding general risk assessments and customer due diligence processes.
The regulatory body noted “significant deficiencies” in Klarna’s general risk assessment, highlighting its failure to evaluate how the bank’s products and services might be exploited for money laundering or terrorist financing. Additionally, Klarna lacked adequate procedures and guidelines for implementing due diligence measures for customers using its invoice product.
Daniel Barr, director general at the Financial Supervisory Authority, emphasized the importance of adhering to anti-money laundering regulations to prevent criminal exploitation of the firm’s operations. He stated, “Our investigation shows that Klarna has not followed the requirements concerning the general risk assessment and due diligence procedures. Therefore, there are grounds for intervention against the bank.”
Despite these issues, Barr indicated that the severity of the problems did not warrant an official warning or the withdrawal of Klarna’s authorization.
In recent times, Sweden’s largest banks have faced scrutiny regarding money laundering compliance, with SEB, the country’s oldest lender, receiving a penalty of Skr 4 billion.
Klarna maintained that the investigation did not reveal any instances of its products being misused by money launderers and pointed out that it was one of the largest Swedish banks, excluding the state-owned SBAB, not to have been previously investigated.
A spokesperson for Klarna stated, “We have maintained a constructive dialogue throughout this process, which reflects our commitment to a robust and secure financial environment.”