Financial Crime World

Norway’s AML Law: Strengthening Financial Integrity with New Regulations

The Norwegian government has recently amended its Anti-Money Laundering (AML) laws through several acts, effective from 2020 to 2023. This article sheds light on the key provisions of the updated legislation.

Chapter 1: Overview

Section 1: Objectives

This Act aims to:

  • Prevent and detect money laundering and terrorist financing activities
  • Ensure the financial and economic system’s stability
  • Protect society as a whole

Section 2: Definitions

  • Money laundering: Acts defined in Sections 332 and 337 of the Penal Code
  • Terrorist financing: Acts described in Section 135 of the Penal Code or financing as described in Section 136 a
  • Obliged entity: Persons as defined in Section 4, subsections (1), (2), and (5)
  • Transaction: Any transfer, mediation, conversion, or investment of assets
  • Beneficial owner: The natural person ultimately owning or controlling the customer or the transaction
  • Politically Exposed Person (PEP): Individuals serving or having served in specific political positions or functions
  • Close family member: Parents, spouses, registered partners, co-habitants, and children, as well as their spouses, registered partners, or co-habitants
  • Person known to be a close associate: A natural person with joint beneficial ownership, close business relations, or sole beneficial ownership for the de facto benefit of a PEP
  • Correspondent relationship: Provision of banking services or relationships between and among obliged entities
  • Company service provider: A natural person or legal entity providing specific services to third parties
  • Provider of gambling services: An entity organizing gambling requiring a license under the Gambling Act

Section 3: Geographical Scope

This Act applies to obliged entities established in Norway and Svalbard and Jan Mayen, with the possibility of regulatory exemptions for the latter.

Chapter 2: Maximum Amounts for Cash Payments and Controls

Section 5: Maximum Amounts for Cash Payments

Persons trading in goods cannot receive cash payments over NOK 40,000 (or equivalent) or in several linked operations. The Tax Office enforces these controls.

Chapter 3: Risk-Based Approach and Procedures

Section 6: Risk-Based Measures

Obliged entities must base their application of this Act on risk assessments of money laundering and terrorist financing risks.

Section 7: Business-Specific Risk Assessment

Entities must identify and assess their risk, taking into account:

  • Business nature
  • Products
  • Services
  • Customer types
  • Customer groups

Section 8: Procedures

Entities must have updated procedures to ensure compliance with this Act:

  • Suitable to their business size
  • Documented
  • Adopted at the top level
  • Enforced by a designated senior manager

Chapter 4: Customer Due Diligence Measures and Ongoing Monitoring

Section 9: Risk-Based Customer Due Diligence Measures and Ongoing Monitoring

Entities must apply customer due diligence measures and conduct ongoing monitoring based on their risk assessment.

[Sections 10-24 detail the customer due diligence measures and ongoing monitoring provisions. These sections will be covered in upcoming articles.]

Stay tuned for more insights into Norway’s updated AML regulations.