Novo Banco’s subsidiary in Luxembourg and three other European banks, have been handed fines by the Luxembourg supervisor following an investigation triggered by the Panama Papers scandal.
Luxembourg’s Financial Sector Supervisory Commission imposed administrative sanctions on nine financial companies, including four banks, for a total of €2.12 million, without specifying the fines imposed on each.
According to the Commission in a communiqué issued on 20 December, among the banks fined were branches of Crédit Agricole, Nordea Bank and DNB Luxembourg.
Five management companies also were fined: Experta Corporate and Fund Services, Link Corporate Services, Maitland Luxembourg, Pure Capital and Victory Asset Management.
The Commission explained that, following the April 2016 release of the Panama Papers, it initiated a "complete verification of the accounts of financial companies" based in Luxembourg, whether or not they were administered by Mossack Fonseca, the company that specialised in creation of offshore companies and whose files were published by the consortium of international journalists.
The Luxembourg regulator aimed at assessing "compliance with customer identification obligations and the detection of risky transactions" under the anti-money laundering and terrorist financing legislation, after many Novo Banco clients in Madeira moved to the Luxembourg branch between 2012 and 2014.
The Commission submitted a questionnaire to 73 banks, and three dozen were inspected by external reviewers.
The regulator said it issued a series of notices in cases where it detected minor infringements and applied fines to companies in which medium or severe infringements were found – as in the case of Novo Banco and the other eight entities sanctioned.
The Commission nevertheless stresses that the sanctioned financial companies already had initiated procedures to become compliant, which was taken into account by the supervisor in determining the size of the fines.
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