Title: Norway’s Stricter AML Laws: FATF’s Evaluation of Norway’s Progress

FATF’s 2023 Follow-Up Report on Norway

In its latest Follow-Up Report released in 2023, the Financial Action Task Force (FATF) has evaluated Norway’s progress in implementing the Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) recommendations.

Key Areas of Compliance and Improvement

1. Assessing risk and applying a risk-based approach (R.1)

2. National cooperation and coordination (R.2)

3. Money laundering offenses (R.3)

4. Confiscation and provisional measures (R.4)

5. Terrorist financing offenses (R.5) and related financial sanctions (R.6-7)

   Norway is largely compliant with these recommendations. However, some areas require improvement as highlighted below.

Areas for Improvement

Non-profit organizations (R.8)

The FATF recommends that Norway establish more stringent due diligence measures concerning non-profit organizations to ensure compliance with AML/CFT regulations.

Customer due diligence (R.10-11)

Norwegian financial institutions must strengthen their customer due diligence processes to better assess potential risks and prevent suspicious transactions.

Record keeping (R.11)

Regulations concerning record-keeping must be strictly enforced and updated regularly to mitigate any potential weaknesses.

New technologies (R.15)

As technology evolves, lawmakers and regulators must update their AML/CFT framework to cover emerging risks and vulnerabilities in this sector.

Wire transfers (R.16)

Further actions are needed to strengthen the procedures surrounding wire transfers to combat potential money laundering and terrorist financing risks.

Reliance on third parties (R.17)

To mitigate risks from third-party relationships, Norwegian financial institutions must strengthen their risk assessments and implement effective ongoing due diligence measures.

Internal controls and foreign branches/subsidiaries (R.18)

Norwegian financial institutions must maintain proper internal controls to ensure compliance with AML/CFT regulations within their operations and subsidiaries.

Higher-risk countries (R.19)

In collaboration with international partners, Norwegian authorities must continue to work towards sharing information on higher-risk countries to prevent potential AML/CFT risks in their financial system.

Reporting of suspicious transactions (R.20)

Stricter measures are needed to ensure financial institutions file suspicious transaction reports promptly and effectively.

Tipping-off and confidentiality (R.21)

Balancing the need to maintain confidentiality while encouraging reporting of suspicious transactions remains a delicate challenge for Norwegian authorities.

Designated non-financial businesses and professions (R.22-23)

Improved oversight and due diligence measures are crucial to prevent money laundering and terrorist financing risks in non-financial sectors.

Transparency and beneficial ownership (R.24-25)

Norway continues to work towards addressing the gaps in transparency and beneficial ownership of legal persons and arrangements.

Regulation and supervision of financial institutions (R.26)

Norwegian regulators must strengthen their monitoring and enforcement of AML/CFT regulations within the financial sector.

Powers of supervisors (R.27)

Expanding the powers of supervisors will aid in effectively combating money laundering and terrorist financing risks in Norway.

Regulation and supervision of designated non-financial businesses and professions (R.28)

Effective supervision of non-financial businesses and professions is essential to prevent money laundering and terrorist financing risks in these sectors.

Financial intelligence units (R.29)

The FATF encourages Norway to strengthen its Financial Intelligence Unit to combat money laundering and terrorist financing threats.

Responsibilities of law enforcement and investigative authorities (R.30)

Norwegian law enforcement and investigative agencies should collaborate more closely to address money laundering and terrorist financing risks.

Powers of law enforcement and investigative authorities (R.31)

Norwegian authorities must expand their investigative powers to combat money laundering and terrorist financing more effectively.

Cash couriers (R.32)

Measures are needed to better control the movement of large cash sums by individuals and criminal organizations.

Statistics (R.33)

To help assess its progress in fighting money laundering and terrorist financing, Norway must publish more comprehensive and reliable statistics.

Guidance and feedback (R.34)

Norwegian authorities must seek proactive guidance and feedback from international partners to continuously improve their AML/CFT framework.

Sanctions (R.35)

The FATF report recommends that Norway adopt severe penalties for individuals and entities found to be involved in money laundering and terrorist financing.

International instruments (R.36)

Norway has ratified all relevant international AML/CFT accords and must ensure domestic laws align with these instruments.

Mutual legal assistance (R.37-39)

Collaboration with other countries in sharing information and providing assistance in mutual legal assistance cases is crucial in combatting money laundering and terrorist financing.

Other forms of international cooperation (R.40)

Norway must work closely with other nations to share intelligence, expertise, and resources to mitigate risks associated with cross-border money laundering and terrorist financing.