Anti-Money Laundering, Anti-Corruption and International Sanctions
Information about how DNB prevents and detects money laundering, terrorist financing, corruption and breach of international sanctions, as well as our risk assessments.
Financial crime is a serious social problem and a threat to the welfare state, while also undermining a healthy and sustainable business sector. Among other things, financial crime includes money laundering, terrorist financing, corruption and violations of international sanctions. At DNB, we prioritise the work of preventing and detecting financial crime. An overarching goal of the work is to reduce financial loss for society, customers and DNB, while maintaining trust in our products and services. This work is an important part of our corporate responsibility.
Three lines of defence
In order for DNB to have proactive management of the risk of being misused for criminal activity, the work of preventing financial crime and complying with relevant rules and legislation forms three lines of defence:
- The first line of defence includes all of the Group’s operational functions and consists of business areas and staff and support units. Employees are responsible for ensuring good internal controls in their daily work tasks. The first line has direct contact with our customers and knows them best.
- The second line of defence consists of the risk management function and the compliance function at DNB. Risk management and compliance are two independent control functions that monitor, control and follow up on managers and employees in the Group’s operational functions.
- The third line of defence is the Group audit. The Group audit assists the Board in ensuring that there is sufficient quality in all significant elements of the Group’s internal control, including risk management and compliance.
The preventative work
In order for the efforts to prevent money laundering, terrorist financing, corruption and violations of international sanctions to be effective, it requires, in brief, that DNB:
- Knows its customers, partners and suppliers,
- Monitors the transactions to and from accounts at DNB,
- Understands, handles and assesses the risk the Group is exposed to, and
- Works holistically across disciplines and business areas.
Furthermore, the preventive work consists of six main elements:
- Top level commitment
- Risk assessments
- Procedures and processes
- CDD measures (background investigations, due diligence, ongoing follow-up)
- Training
- Monitoring
Risk assessments
As mentioned above, DNB must understand the risk in its own business. DNB must understand how the Group can be misused for financial crime and we are continuously working on identifying relevant risk factors. Both international and national authorities expect the bank to have this overview.
DNB prepares annual risk assessments of the risk of money laundering and terrorist financing, corruption and violations of international sanctions. The risk assessments provide an overview of which risk factors are relevant to the Group. They also form the basis for the measures and controls we need to implement within the group, and relative to our customers, suppliers and partners, in order to manage the risk we are exposed to.
The DNB Group’s overall risk assessment for the three professional areas consists of three parts:
1. DNB’s group-wide assessment of the inherent risks of
- Money laundering and terrorist financing
- Corruption
- Violations of international sanctions
2. Specific risk assessments of DNB units and their “residual risk” in each area
3. Aggregated group-wide residual risk assessments for each area
Inherent risk means risk that exists before control measures are taken into account. By assessing inherent risk, we identify which of DNB’s business areas, products and services, customers and third parties are considered to be at risk of misuse. Once the risk factors have been identified and reasonable measures implemented, we still have a “residual risk”.
Anti-Money Laundering and counter-terrorist financing
Money laundering is making profits from criminal acts and integrating them into the legal economy. The purpose is to make it look like the profits are earned legally, and hide the source as the result of crime.
Terrorist financing is the financing of people or groups who intend to use the funds to commit terrorist acts, and other financial support for such actions. The obligation to detect and prevent terrorist financing is not directed at the origin of the money, but what the money is to be used for.
Because banking involves a risk of being misused for money laundering, banks are required to carry out a number of screening measures through the Money Laundering Act. The fight against crime is essentially a government task, but banks and businesses are required to contribute in different ways to detect and prevent money laundering and terrorist financing.
DNB must know its customers
When we know our customers, DNB will be able to detect whether a customer’s use of the bank may involve money laundering or terrorist financing. To achieve this, we collect information about who our customers are and how they plan to use the bank. Customer information is collected when establishing customer relationships, and it is continuously being reviewed and updated.
We ask a number of questions and require documentation to get to know the customer better. This task must be done thoroughly. Therefore, in some cases it may take time to open an account with us, but this way we also reduce the risk of people with dishonest intent misusing the bank. At regular intervals, we ask the customer questions, regardless of whether anything illegal has taken place. This is just as much about securing safe and good quality services for our customers, as stopping those who have dishonest intent.
DNB has a duty to monitor customer transactions
Every day, more than nine million transactions go in and out of accounts at DNB. These transactions are screened through our electronic monitoring system. If we identify transactions we don’t understand the background or purpose of, we will initiate investigations and possibly report them to Økokrim (the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime). The threshold for doing this is low. Økokrim (the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime) investigates whether a criminal act has taken place. The bank has a duty of confidentiality related to the investigation of suspicious transactions and cannot inform either customers or others about the assessments we make.
DNB’s assessment of money laundering and terrorist financing risks
As mentioned above, DNB must understand the risk in its own business. We need to understand what risk of money laundering and terrorist financing the Group is exposed to.
Risk assessment DNB 2022 – Money laundering and terrorist financing (PDF)
Risk assessment DNB 2022 – Money laundering and terrorist financing
Anti-corruption
Corruption is giving or offering and receiving or accepting an undue benefit relative to carrying out a position, office or task. Corruption is punishable both for individuals who work at DNB and for DNB as a group.
Corruption is punishable by both Norwegian and international rules and legislation. DNB operates in several locations around the world and is obliged to comply with the corruption regulations imposed upon the business at all times. DNB’s activities are aimed at a number of players, including customers, suppliers, agents and other partners, as well as public authorities. As a player in Norwegian society, DNB also has a responsibility to fight corruption.
At DNB, we have zero tolerance for corruption. The purpose of our anti-corruption efforts is to:
- Prevent people acting on behalf of the DNB group from carrying out active or passive corruption or contributing to corruption
- Prevent the DNB group’s products and services being misused for corruption
- Detect whether active, passive or a contribution to corruption would still occur
- Provide guidance in handling unwanted corruption incidents
Our employees meet our customers, partners and suppliers every day. An important part of DNB’s anti-corruption efforts is to enable our employees to respond if they are exposed to corruption attempts. We ensure openness and verifiability so that it is not possible to ask questions about the Group’s or our employees’ integrity. Training and competency building related to corruption risk is central to achieving this.
We also have zero tolerance for DNB’s products and services being used to implement corruption, for example by a bribe transaction occurring through DNB. A bribe transaction involves simultaneous money laundering of the profit from corruption. This side of the corruption risk is therefore safeguarded by the bank’s anti-money laundering work.
National and international authorities require clear and robust measures to prevent corruption. DNB must understand, identify and assess the risk of corruption associated with its business. This involves DNB having to know its customers, suppliers and partners. In addition, a central factor is that we are continually working to identify and assess the risk of the bank being used in corruption, either directly or by bribe transactions going through our systems.
DNB’s assessment of corruption risk
As mentioned above, DNB must understand the risk in its own business. We need to understand what risk of corruption the Group is exposed to.
International sanctions
Sanctions are used as a general term for non-military measures adopted by governments or international organisations (mainly the UN Security Council and the EU) as part of their foreign and security policy. Sanctions involve the introduction of financial or diplomatic restrictions directed at, for example, a government, a regime, companies or individuals. The purpose of the sanctions is to influence the policy or behaviour of the party/parties against which the sanctions are introduced, e.g. by forcing changes by limiting the player(s)’ financial and material ability to commit the undesirable actions.
DNB is exposed to international sanctions regimes on several levels. Firstly, DNB operates a business that involves a number of operators in many different countries, including its own employees, customers, suppliers, correspondent banks and other partners as well as public authorities. Secondly, the DNB group offers and buys products and services that can directly or indirectly involve exposure to international sanctions. Thirdly, our customers’ business partners can represent a sanction risk for DNB if DNB is involved in transactions with these third parties.
DNB is obliged, among other things, to freeze transactions that are contrary to international sanctions. Furthermore, we must not be misused to circumvent the regulations. Therefore, we screen our customers and their transactions against sanctions lists. However, screening alone is not sufficient, so we need to know our customers well. It is also important to have up-to-date knowledge of the regulations. This changes frequently, and different sanctions regimes apply to different parts of the Group’s areas of operation.
Both Norwegian and international authorities have high expectations of financial institutions to develop, implement and routinely update a sanction compliance programme. The program must be adapted to the business’s individual risk exposure.
Carrying out risk assessments is a fundamental prerequisite for being able to identify, assess and handle DNB's sanctions risk. Risk assessment therefore forms the basis of DNB's programme for complying with the sanctions regime.
DNB’s assessment of sanctions risk
As mentioned above, DNB must understand the risk in its own business. We must understand what risk of breaches of international sanctions the Group is exposed to.
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