Financial Crime World

Title: Norway’s New Legislation to Combat Financial Crime and Terrorist Financing: A Closer Look

In an effort to strengthen its financial regulatory framework and combat financial crimes, including money laundering and terrorist financing, Norway has recently passed several amendment acts. This article provides a closer look at the key amendments in the new legislation, focusing on the prevention and detection of money laundering and terrorist financing.

Unofficial Translation and Coverage Period

  1. The Financial Supervisory Authority of Norway (Finanstilsynet) now provides an unofficial translation of the Norwegian version of the Act. The legislation, which includes Acts effective from January 2020 to 2023, covers various aspects of anti-money laundering (AML) and counter-terrorist financing (CTF) measures.

Objectives and General Provisions

  1. Chapter 1 of the Act outlines the objectives and general provisions, emphasizing the importance of preventive measures against money laundering and terrorist financing. The definitions section clarifies key terms such as:
    • Money laundering
    • Terrorist financing
    • Obliged entity
    • Transaction
    • Beneficial owner
    • Politically exposed person (PEP)
    • Close family member
    • Correspondent relationship

Maximum Amounts and Risk-Based Measures

  1. Chapter 2 and Chapter 3 of the Act introduce changes to maximum amounts for cash payments and risk-based measures for obliged entities. Sections 6 and 7 highlight the importance of risk assessments based on the nature and size of businesses, products, services, and customer relationships.

Customer Due Diligence Measures and Ongoing Monitoring

  1. Obliged entities are required to apply customer due diligence measures and ongoing monitoring, assessing the risk of money laundering and terrorist financing based on various factors. New provisions regarding risk profiles, identification of beneficial owners, and simplified/enhanced customer due diligence measures have been introduced.

Sector-Specific Amendments

  1. Various amendments apply to specific sectors like insurance, estate agency, and gambling services. The legislation aims to address potential vulnerabilities in these areas and provide additional guidance for obliged entities. For instance, insurance companies must identify and assess the risk posed by policyholders and take measures to ensure compliance with anti-money laundering regulations.

Additional Provisions

  1. The legislation introduces rules for foreign payment institutions’ agents, exemptions for certain financial activities, and measures for dealing with occasional or very limited financial activities and gambling services. For example, occasional financial activities such as occasional sales of valuable assets are subject to different AML/CTF requirements.

Future Regulations and Guidelines

  1. The Norwegian Ministry of Finance will issue further regulations and guidelines related to the implementation of these amendments in the coming months.

As Norway continues its efforts to maintain a robust and compliant financial system, this legislation provides a solid foundation for preventing financial crimes and addressing the risks associated with money laundering and terrorist financing.