According to the Department, in 2016, the release of what became known as " Panama Papers" exposed Nordea’s role in helping hundreds of its customers create tax-sheltered companies using offshore accounts. The activity at Nordea’s former branch in Vesterport, Denmark further implicated the Bank in the flow of illicit funds with entities connected to the so-called Russian Laundromat, the Azerbaijani Laundromat, and the Hermitage Capital allegations.

The Department’s subsequent investigation revealed that the Bank’s counter-money laundering safeguards at its high-risk, former Baltic Branches, failed to adequately compensate for the increased risk level, leaving the Bank vulnerable to money laundering and the flow of suspicious transactions. Moreover, the Department said, Nordea consistently failed to properly implement compliance initiatives, exposing the Bank to elevated financial crime risk.

Compounding these weaknesses, the Bank formed relationships with high-risk banking partners, further exposing it to additional money laundering risks and making it possible for the Bank to facilitate financial crimes.

The Department’s investigation additionally found that the Bank’s transaction monitoring system was inadequate, leading Nordea itself to acknowledge that its overall AML risk was “critical.”

The combination of deficient counter-money laundering controls controls, an unsophisticated transaction monitoring apparatus and a decentralised global compliance program created a set of circumstances that exposed Nordea’s financial channels to a high risk of criminal abuse. Nordea’s relationships with U.S. banks imported those risks to the New York financial system.

Further Reading: The settlement agreement is here:https://www.dfs.ny.gov/system/files/documents/2024/08/ea20240827-co-nor…