Moneygram Must Sort AML Deficiencies By End-2022, Says Swedish Watchdog

September 8, 2022
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Sweden’s Finansinspektionen (FI) has told US cross-border payments company Moneygram that it must solve its money laundering deficiencies by December 30 at the latest, in the latest enforcement action from the regulator.

Sweden’s Finansinspektionen (FI) has told US cross-border payments company Moneygram that it must solve its money laundering deficiencies by December 30 at the latest, in the latest enforcement action from the regulator.

Concluding its investigation, Sweden’s FI has admonished Moneygram for not assessing the risks associated with its cash transactions.

Meanwhile, the company's risk assessment also lacks an analysis of who their customers are as well as the risks associated with these customers, the regulator said in its reprimand.

The FI also said that the company, which is headquartered in Texas, has not assessed the risks associated with its use of agents as a distribution channel.

Moneygram confirmed that it will fix the deficiencies, according to the FI. However, it has failed to explain how the deficiencies will be corrected or when, and has only vaguely indicated that some of the alleged deficiencies will be corrected in the fourth quarter of this year.

“Under those conditions, the Financial Supervisory Authority cannot predict that the deficiencies will be remedied,” the regulator said.

As well as its December deadline, MoneyGram must also report in writing to the regulator by January 31, 2023 at the latest that they have implemented the measures that FI orders and how this has resulted in the order being followed.

“Not making an assessment of the risk of cash transactions, when the business is located in a vulnerable area, can mean that the company runs great risks of being exploited by people who want to launder money,” said Petra Bonderud, deputy head of the operational risks department at FI.

She added that “it is absolutely necessary that the company now corrects these shortcomings.”

FI has also investigated other parts of Moneygram's work against money laundering and the financing of terrorism.

Here, the company has taken measures during the course of the investigation or presented action plans that FI can accept.

The probe into Moneygram’s compliance was spurred by the FI’s review of how the four largest money transmitters in Sweden comply with the money laundering rules.

Particular focus has been on the risk assessment of operations in Sweden and the support and training that the companies provide to their agents.

This year, Moneygram has been no stranger to tussles with the authorities. In March, a penalty of $8.25m was imposed by New York’s Department of Financial Services superintendent, Adrienne A. Harris.

Harris said that the money transmitter had failed to properly supervise agents engaging in suspicious transactions to China.

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