Norway's Partially Compliant Areas: PEPs, Correspondent Banking, Legal Entities

Background

OSLO, Norway, March 23, 2023 – The Financial Action Task Force (FATF) has released its report evaluating Norway's efforts to implement the international organization's Recommendations against money laundering and terrorist financing.

Findings and Evaluation Status

The FATF report covers 40 recommendations with the following evaluation statuses for Norway:

1. Compliant (C)
2. Largely Compliant (LC)
3. Partially Compliant (PC)
4. Non-Compliant (NC)

FATF's Assessment of Norway

Partially Compliant Recommendation statuses 👇

Recommendation	Evaluation Status
[R.1] Risk assessment and application of a risk-based approach	LC
[R.13] Correspondent banking	PC
[R.24] Transparency and beneficial ownership of legal persons	PC
[R.25] Transparency and beneficial ownership of legal arrangements	C (In theory)
[R.29] State cooperation and information exchange	LC
[R.33] Statistics	PC

Compliant Recommendation statuses 👇

Recommendation	Evaluation Status
[R.3] Money laundering offense	C
[R.4] Confiscation and provisional measures	C
[R.5] Terrorist financing offense	C
[R.6] Targeted financial sanctions related to terrorism and terrorist financing	LC
[R.10] Customer due diligence	LC
[R.11] Record keeping	C
[R.12] Politically exposed persons	C
[R.14] Money or value transfer services	C
[R.18] Internal controls and foreign branches and subsidiaries	LC
[R.19] Higher-risk countries	LC
[R.20] Reporting of suspicious transactions	C
[R.21] Tipping-off and confidentiality	C
[R.25] Transparency and beneficial ownership of legal arrangements	C (In principle)
[R.27] Powers of supervisors	C
[R.28] Regulation and supervision of designated non-financial businesses and professions (DNFBPs)	C
[R.30] Responsibilities of law enforcement and investigative authorities	C
[R.35] Sanctions	C
[R.36] International instruments	C
[R.39] Extradition	LC

Challenges in Certain Areas

Despite most of the areas receiving compliant or largely compliant ratings (👆), Norway still faces some challenges:

📌 Politically Exposed Persons (PEPs): There is room for improvement in managing politically exposed persons (PEPs), for which Norway only received a partial compliant rating.

📌 Correspondent Banking: Some areas of correspondent banking did not meet the FATF's expectations, and are rated partly compliant.

📌 Legal Entities and Arrangements: Norway's level of transparency regarding the beneficial ownership of legal entities and arrangements was deemed compliant in principle, but the FATF raised some concerns about its practical implementation.

📌 Statistics: While the Norwegian authorities supply the FATF with the necessary data, there is some concern regarding the quality and completeness of the data provided.

Conclusion

Norway has made substantial progress in addressing money laundering and terrorist financing risks. However, the country still requires improvement in specific areas, including:

1. Management of Politically Exposed Persons (PEPs)
2. Correspondent Banking
3. Transparency of Legal Entities and Arrangements.