Skip to main content

Norway's Strict KYC Process: Combating Money Laundering

· 3 min read
Daniel Smith
Money Laundering Specialist

Norway's Know Your Customer (KYC) process is an essential component of its banking system, designed to onboard both domestic and international clients while adhering to strict Anti-Money Laundering (AML) regulations.

KYC Process for Domestic and International Clients​

  • Domestic Individuals: Name, photograph, identification number, and either a passport or a driving license. (Figure 1)
  • International Individuals: Signature, photograph, identification number, and a passport or a certificate of registration or incorporation. (Figure 2)

Domestic Identification Figure 1: Domestic identification documents

International Identification Figure 2: International identification documents

Electronic Signatures and AML Regulations​

  • Legal Status: The Electronic Signatures Act of 15 June 2001 outlines the necessary procedures for obtaining, verifying, and filing e-signatures. (Section 1)
  • AML Laws: Financial institutions apply 'customer due diligence measures' to verify the identity and beneficial ownership of clients, first introduced in 2009.

Regulatory Landscape and Enforcement​

  • Finanstilsynet: Primary AML regulator in Norway.
  • Mutual Evaluations: Norway adheres to the FATF's mutual evaluations. (Example Report)
  • Minimum Transaction Thresholds: There are no minimum transaction thresholds for reporting purposes.

Corporate Requirements and Enhanced Due Diligence​

  • Corporate Verification: Use a certificate of registration or certificate of incorporation from the public register to verify a legal person's identity.
  • Beneficial Owners: Norwegian law mandates that financial institutions verify the identity of beneficial owners under the Money Laundering Act.

Certificate of Registration Figure 3: Certificate of Registration

Specific Situations and High-Risk Transactions​

  • PEPs: Apply 'appropriate customer due diligence measures.' (FATF Guidance on PEPs)
    • Verify the origin of their assets and of capital involved in the relationship or transaction.
    • Carry out enhanced ongoing monitoring.
    • Obtain senior management approval before establishing a customer relationship. (Section 11, Section 4)
  • Correspondent Banking Relationships: Assess the correspondent institution's control measures and monitor ongoing.

Note: Relationships with shell banks without substance are not permitted.

Non-Face-to-Face Transactions and Relationships​

  • Risk-Based Diligence: Implement risk-based customer due diligence and ongoing monitoring for non-face-to-face transactions or relationships.

Reporting Suspicious Activity and Compliance​

  • Suspicious Activity Reports: Submit Suspicious Activity Reports to ØKOKRIM, The National Authority for Investigation and Prosecution of Economic and Environmental Crime in Norway.
  • Electronic Suspicious Transaction Monitoring Systems: Use electronic suspicious transaction monitoring systems.
  • Consequences of Non-Compliance: Fines or imprisonment of up to one year for the most serious breaches.

Conclusion: Norway's dedication to AML regulations ensures a secure and reliable financial environment for its customers and businesses, fostering trust and confidence in Norway's financial institutions.