.svg)
Sweden’s financial watchdog has said that there are shortcomings in the payments institution’s approach to anti-money laundering (AML) compliance, but it will not be taking further action.
The Swedish Financial Supervisory Authority (Finansinspektionen - FI), has highlighted failings in Western Union’s efforts to fight money laundering and terrorist financing, but has concluded that the measures that the company has taken and/or plans to take are sufficient to correct the shortcomings.
However, the lack of action could be down to the fact that Western Union, referred to as Western Union Payment Services Ireland Limited (WUPSIL) by the regulator, is a foreign payments institution.
According to the FI, the options available to intervene against foreign payment institutions are different in comparison to Swedish-based payment institutions.
Indeed, the FI has taken the only intervention measure available to it at the first stage and that is to order the company to take corrective action.
Among the issues that the FI uncovered were failings in the company's compliance with the country’s Money Laundering Act, which is transposed from EU law.
To correct this issue, the company submitted an updated version of its general risk assessment, which the FI considers as having solved the issue.
For the remaining deficiencies, the FI has confirmed that Western Union has reported on how it plans to take action and solve the problems.
The FI also pointed out in its investigation that Western Union failed in its suitability assessments for agent employees, which the company has told the regulator it will work to remedy. Agents for the company earn commission on transfers that it processes for consumers.
The FI further took issue with how the company trains its agent employees. For example, the regulator complained that employees are not necessarily receiving relevant training and information to fulfil the company’s regulatory requirements.
Perhaps due to the nature of its business model, this is not the first time that the company, which is headquartered in Colorado, has faced the ire of financial services regulators.
In 2018, the company made headlines after agreeing to pay the New York State Department of Financial Services a fine of $60m for violations of the New York Bank Secrecy Act (BSA) and AML laws.
The investigation found that the company had failed to detect or deter money laundering, while senior executives had ignored the warning signs and failed to report to the regulator.
