Financial Crime World

Title: Norwegian Regulators Crack Down on Money Laundering and Terrorism Financing: Compliance Obligations for Businesses

Overview

Amidst increasing global concerns over financial crimes such as money laundering and terrorism financing (ML/TF), Norway’s regulatory authorities are taking a firm stance against such illicit activities. This article outlines the roles of key regulatory bodies in ensuring Norwegian businesses adhere to strict AML/CTF regulations.

Key Regulatory Bodies

1. Finanstilsynet: A Pillar of Financial Stability and Market Functioning

The Norwegian Financial Supervisory Authority (Finanstilsynet) is the primary regulator for banks, insurers, finance companies, investment firms, financial instrument markets, securities depositories, estate agents, e-money institutions, auditors, accountants, and other entities.

  • Ensuring financial stability and market functioning
  • Supervising institutions and markets to maintain the integrity of Norway’s financial sector

The Supervisory Council for Legal Practice (Norgesadvokatsamfunn) is responsible for recognising and overseeing advocates and other legal professions in Norway. Its role includes monitoring and enforcing ethical standards within the Norwegian legal community.

3. Norwegian Gaming Authority: Regulating Gambling and Lotteries

The Gaming Authority (Lotteritilsynet) supervises the management and control of private lotteries and state-operated gaming, overseeing the rapidly evolving Norwegian gaming industry.

AML/CTF Obligations for Businesses

With the growing need to ensure businesses comply with Money Laundering and Terrorism Financing (ML/TF) regulations, the following guidelines are essential:

4. Determining and Managing Your Company’s ML/TF Risks

  • Assess the type and scale of your business
  • Evaluate goods or services offered
  • Consider client interactions
  • Categorize and type of clients
  • Geographical considerations

5. Implementing Controls and Adhering to AML Act’s Provisions

  • Customer Due Diligence (CDD) controls
  • Continuous customer monitoring
  • Record-keeping for a minimum of five years after client relationships have ended
  • Internal controls (compliance officer, employee background checks, independent scrutiny)

6. Reporting Suspicions to the Financial Intelligence Unit (FIU)

  • Investigate suspicious activities fully
  • File a Suspicious Transaction Report (STR) with the Norwegian FIU

Entities Subject to AML/CTF Regulations

The following entities are subject to the AML/CTF regulations:

  • Banks and other financial institutions
  • The Norwegian central bank
  • Companies involved in foreign currency transactions
  • Pay-for-service businesses
  • Management firms for investment funds
  • Insurance-related activities
  • Companies that carry out deposit-related activities
  • Alternative investment fund managers

Conclusion

Norwegian regulators have established a robust regulatory framework to combat money laundering and terrorism financing effectively. Businesses must comply with these obligations to protect their reputation and contribute to maintaining Norway’s status as a trustworthy and stable financial hub.