The Danish Financial Services Authority (FSA) has ordered PFA to supply information on customers using a certain pension product, following a money-laundering inspection it carried out in May – issuing the DKK730bn (€98bn) pension provider with four injunctions.
The FSA (Finanstilsynet), said in a statement the inspection had focused in particular on the company’s organisation regarding money-laundering, its policies, procedures and internal controls as well as customer due-diligence procedures, including customer monitoring.
“The Danish Financial Supervisory Authority assesses that the company’s inherent risk of being used for money laundering or terrorist financing is low in relation to the average financial company in Denmark,” the agency said.
However, it said PFA did have some pension products, including the so-called §53 a product – a type of pension unsuitable for Danish taxpayers, since contributions are not deductible and returns are taxed – which the FSA said were classified as medium-risk products.
The watchdog said it had ordered PFA to obtain identity information on all customers.
“In doing so, the company must ensure that the company can determine whether the customer is a politically-exposed person, a close connection to, or close collaborator of a politically-exposed person,” it said.
Under anti-money laundering regulations, extra scrutiny is applied to politically-exposed people – those who have been appointed by a community institution, international body or state – because of the risk of the proceeds of bribery and corruption being laundered.
PFA has also been ordered to check customers’ identities, and to submit a plan on how it makes sure it implements updates to customer knowledge information for all customers in accordance with the Money Laundering Act, according to the FSA.
The commercial pension provider – Denmark’s largest – has also been ordered to investigate suspicious transactions, record and store the results of those probes, as well as ensuring they can be proved to the FSA, the watchdog said.
In response, Nina Groth, director of customer and pension service at PFA, said in a statement that in general, the FSA’s review showed the company handled the obligations arising from money laundering legislation very well, and followed the guidelines.
“PFA takes its social responsibility to prevent money laundering and terrorist financing very seriously, and therefore we naturally take note of the decision from the Danish Financial Supervisory Authority, and ensure that the orders given by the Danish Financial Supervisory Authority are followed up,” she said, adding that this work was already underway.
Back in July, the FSA ordered six other Danish pension providers to revise their risk assessments regarding money laundering, as the agency took action following a tightening of the regulations at the end of last year.
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