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Prevention of money laundering

How do we combat money laundering and terrorist financing?

A sustainable and trustworthy finance system is important for all of us. Only by trusting each other and working together can we ensure that the system functions smoothly. As a bank, we do our bit by undertaking activities to prevent money laundering and terrorist financing. We and the other banks are obliged by legislation to do this. In view of these obligations, and in order to serve our clients better and to look after their security, we ask you to fill out and regularly update the Customer Questionnaire for Natural Persons

Please fill in the Customer Questionnaire for Natural Persons, which will help to meet the legal requirements, according to which we must:

  • get to know our client and understand the purpose and nature of his/her relationship with the bank;
  • have up-to-date and accurate customer information that allows for a responsible assessment of money laundering and terrorist financing risks and for timely protection of customers.

As a result, we are constantly reviewing and updating customer data. We establish and maintain business relationships only with those clients who act transparently and provide all the necessary information about themselves. We always notify them in advance about the need to fill in or update the Customer Questionnaire for Natural Persons. Remember to provide your contact information to the bank and follow the notifications in the online bank.

We request this information from both local natural persons and legal entities, and from our foreign clients, who are asked to provide reliable evidence substantiating their professional, economic, social or personal connection with our country.

Fill the Questionnaire

If you do not use internet banking or are currently unable to log in, print out a Questionnaire and fill it in. Book a consultation online in the preferred Swedbank branch at the time convenient for you and bring the completed Questionnaire.

In order to implement the statutory requirements for customer knowledge, please periodically update the Questionnaire. The frequency of the update depends on various circumstances, e.g. potential risks of money laundering and terrorist financing. The bank will inform you of the upcoming date by which the Questionnaire must be updated. The legislation, by establishing strict requirements for customer recognition, also provides for sanctions that the bank may apply if the customer avoids or refuses to submit the Questionnaire at the request of the bank and within the set deadlines. There are no restrictions on clients who complete the Questionnaire in a timely and proper manner

We ask you to provide us with revenue data so that we can better understand the origin of the funds in our clients’ accounts, as well as whether the transactions you perform match your income. This helps us get to know our customers better and makes it easier to ensure the security of our customers' funds.

Laws and market surveillance institutions require us to know to whom the bank is providing its services. The Questionnaire is therefore the first step in getting to know our customers better and getting the information required by law.

Information on the position is provided on a voluntary basis. We ask clients to indicate their professional specialisation, as this helps us to get to know them better. If you choose to provide this data, it will be used to calculate personal loan limits and for the bank and Swedbank Group companies registered in Lithuania to prepare personal offers for you. Personal data will be processed on the basis of legitimate interests and in accordance with the Principles of personal data processing. A Taxpayer Identification Number (TIN) is a personal identification number used for the exchange of tax information between different countries in accordance with the Common Reporting Standard (CRS) or the FATCA (Foreign Account Tax Compliant Act). In the case of a Lithuanian resident, the Taxpayer's code coincides with the customer's personal code. The customer must indicate all Tax Payment States and all Taxpayer Codes corresponding to the established structure. The structure of Taxpayer Codes for different countries is provided here.

Strict security and confidentiality regulations are applied to all data that you supply to us.

We disclose customer data to third parties only with the written consent of the customer, or when the disclosure is required by the competent authorities (law enforcement, tax administration, court, etc.), which have the right, under the provisions of current legislation, to receive information from the bank.
Banks operating in Lithuania are obliged to inform VMI (Valstybinė mokesčių inspekcija – the State Tax Inspectorate of Lithuania) about customers who are or may be potential taxpayers in foreign countries. This obligation is specified by the following legislation:

  • FATCA – Foreign Account Tax Compliance Act. This law is applied pursuant to an international treaty between the Republic of Lithuania and USA, whereby it is required that financial institutions in the Republic of Lithuania should provide information about customers who are taxpayers in USA. The Republic of Lithuania is required to implement this treaty as part of its Law on International Treaties;
  • Compliance with the legislation mentioned above is specified in detail, with a comprehensive description of banks’ obligations, in the Republic of Lithuania Law on Administration of Taxation, in Resolution No. 1017 of 23 September 2015-09-23 of the Government of the Republic of Lithuania and in other subsequent legislation, which can be perused on the VMI website www.vmi.lt.
  • The CRS (Common Reporting Standard) regulates exchange of taxation information between countries that observe the CRS (a list of them can be found here). Banks operating in Lithuania have been obliged since 2017 to supply the VMI with information about natural persons and legal entities that are or may be taxpayers in CRS countries. VMI provides this information to the taxation institutions of the relevant countries.

Possible US taxpayers

FATCA requirements have been applied in Lithuania since 01-07-2014, and these require all banks operating in Lithuania to identify possible US taxpayers and to inform the VMI about these customers. VMI has to pass this information on to the US Internal Revenue Service (IRS).
Those considered to be possible US taxpayers include:

  • citizens;
  • Individuals who were born in USA;
  • Individuals who hold a “Green Card” for residence in USA.
  • Individuals who have been living in the USA for a certain period of time (with certain exceptions);
  • Individuals who meet certain criteria specified in the FATCA legislation.

What to do if you are a US taxpayer

Please complete the Customer Questionnaire for Natural Persons on our Internet banking page, or come to any branch of Swedbank and indicate the American TIN (Tax Identification Number) that has been assigned to you by IRS.

What to do if you are a taxpayer of a CRS country?

Please complete the Customer Questionnaire for Natural Persons on our Internet banking page or come to any branch of Swedbank and specify which country you are a taxpayer of, the taxpayer identification number assigned to you by that country and any other information requested.

You can fill in and submit the Questionnaire in one of the most convenient ways for you:

  • by logging in to your internet banking page;
  • by booking a consultation online and arriving to the preferred Swedbank branch at the time convenient for you. Bring a valid personal identity document (e.g. passport, ID card) with you.
The Questionnaire may be completed in Lithuanian, English and Russian. The law obliges us to receive the information specified in the Questionnaire directly from our customers. The information available to these authorities can be used as an additional source of data to verify the information you provide.

These clarifications are aimed for you, if you are independently completing the Customer Questionnaire for Natural Persons (hereinafter referred to as the Questionnaire) of “Swedbank”, AB (hereinafter referred to as the Bank) upon the Bank’s request, and if you are uncertain as to what information Bank requests and where you could find it independently. The questionnaire is compulsory for opening a bank account or renewal of your information.

Title Clarification
“KEY INFORMATION”

You can easily find your data in your identity document, i.e. your passport or personal identity card.

Note! A personal identity card does not provide any data about the country of birth.

You may have several citizenships if you have personal identity documents issued by several states. In this case, please specify all your citizenships.

If you do not have certain information or you are not sure, ask your parents or guardians.

“PERSONAL IDENTITY DOCUMENT”

It is most likely that you only have a personal identity document issued in Lithuania. In this case, in this section please indicate the following information:

  • type of the personal identity document (passport or personal identity card);
  • Lithuania as the state of issue of the personal identity document;
  • number of the personal identity document;
  • date of issue and expiry of the personal identity document.

In the event you have more than one personal identity document, please provide data about these documents in this section.

In the event you do not have a personal identity document issued in Lithuania, please, in this section, provide data about your personal identity documents issued by another state AND the (temporary or permanent) residence permit in the Republic of Lithuania (if you have one).

If you do not have certain information or you are not sure, ask your parents or guardians.

“CONTACT INFORMATION”

Please indicate your contact phone number and e-mail address, if you have them.

If you live permanently in Lithuania, you will most probably have a telephone number provided by telecommunications companies operating in Lithuania. In this case, the area code in the phone number is +370, and the phone number starts with the number 6.

In the e-mail section provide the e-mail address, to which the Bank could send information, which is aimed for you and which is related to the Bank services you use. The Bank could also use this e-mail address to send you a request to revise the information provided in the Questionnaire.

If you do not have certain information or you are not sure, ask your parents or guardians.

“ADDRESS OF THE PERMANENT PLACE OF RESIDENCE”

In this section, please indicate the address of your permanent place of residence, i.e. the address where you live permanently or spend most of the time (state, municipality, region, city, street, number of the house/apartment and the post code (you can find it on the website www.post.lt).

If you do not have certain information or you are not sure, ask your parents or guardians.

“CORRESPONDENCE ADDRESS”

Complete this section only if you want Bank notifications to be delivered to the address other than the address of the place of residence.

If you do not have certain information or you are not sure, ask your parents or guardians.

“INFORMATION ON TAX PAYMENT”

If you are a citizen of the Republic of Lithuania and permanently reside in Lithuania, the state where you pay taxes is Lithuania, and your tax payer number is your personal number indicated in your personal identity document.

If you are a citizen of another state and you have a temporary or permanent residence permit in Lithuania, your Lithuanian tax payer number is your personal number indicated in your temporary or permanent residence permit in Lithuania.

Ask your parents or guardians for information about the tax payer number provided by a foreign state.

If you do not have certain information or you are not sure, ask your parents or guardians.

“LINKS WITH LITHUANIA AND REASONS FOR HOLDING A BANK ACCOUNT”

If you permanently reside in Lithuania, do not complete this section and leave it empty.

If you permanently reside NOT in Lithuania, you have to complete this section of the Questionnaire and indicate the reason of your links with Lithuania:

  • if you work in a Lithuanian company, please indicate “Work in a Lithuanian company” and provide the name and code of the company. You must also submit a document confirming that you work in a Lithuanian company, for example, a certificate from your place of work or a job agreement;
  • If you are the owner of a Lithuanian company or you participate in the management of such a company, please indicate “I own a company in Lithuania and I participate in the management of this company” and provide the name and the code of the company, as well as indicate whether you are the owner of the company or a member of the management body and provide the share of your equity in the company expressed in percent. You must also submit a document confirming that you are the owner of a Lithuanian company or participate in the management of such a company, for example, an extract from the Register of Legal Entities;
  • if you study in a Lithuanian education institution, indicate “Studies in a Lithuanian education institution” and provide the name of the education institution. You must also submit a document confirming that you study in an education institution, for example, a certificate from the education institution;
  • if your mother, father, brother, sister or guardian is a citizen of the Republic of Lithuania or a legal resident of Lithuania, i.e. he or she has a valid temporary or permanent residence permit in Lithuania, please indicate “I have family links in Lithuania” and provide the full name and personal number of this person. You also have to provide a document confirming your family links in Lithuania, for example, a certificate of birth;
  • if you own a parcel of land or another immovable property in Lithuania, please indicate “I own a property in Lithuania” and provide information on whether it is a parcel of land or other immovable property (for example, apartment, house), the address and the post code (it can be found on the website www.post.lt) of this property. You must also submit a document confirming that you own a property in Lithuania, for example, an extract from the Real Estate Register, a real estate sale and purchase agreement certified by a notary public, or a certificate of the right of inheritance;
  • if the reason of your links with Lithuania is other than the above-specified, please indicate“Other reasons for holding an account” and provide detailed information about it, for example, “Receipt of inherited funds”, and submit a document confirming such a reason (if you have such a document).

If you do not have certain information or you are not sure, ask your parents or guardians.

“REPRESENTATIVE”

In this section, indicate your mother, father or guardian and the full name and personal number of this person.

If you do not have certain information or you are not sure, ask your parents or guardians.

“INCOME/ ASSETS”

Completion of this section:

  • Please indicate whether you are planning to transfer funds/securities to the account with the Bank from other financial institutions within the upcoming 3 months. In the event your answer is “YES” and the amount specified is higher than EUR 15,000, you have to provide detailed information about the source/origin of the funds and/or assets, i.e. the source of the funds to be transferred and/or the funds for acquisition of the securities (for example, savings), and to specify the countries from which the sources/securities were transferred.
  • When completing the section “Specify the average monthly amount to be transferred to the account with “Swedbank”, AB and the origin of the money”, try to estimate the approximate monthly amount of money to be transferred to your account with the Bank. If the money is transferred to you by your parents/guardians, please estimate the approximate amount of money they give your per month. Choose the appropriate amount. In the event the amount specified by you exceeds EUR 15,000, you have to specify the origin of the money, i.e. the source of the money transferred to the account (for example, transfers from relatives, wages), and in the section “The total estimated amount of my assets”, you have to indicate the amount of the planned average monthly income, which will be transferred to your account with the Bank.
  • If you receive money only from your parents/guardians or other relatives, in the section “The source and the average amount of your all monthly income (including the funds transferred to accounts with banks other than “Swedbank”, AB (specify in EUR)” indicate “Transfers from relatives” and select the appropriate amount.

If you do not have certain information or you are not sure, ask your parents or guardians.

“NATURE AND PURPOSE OF THE RELATIONS WITH THE BANK”

Completion of the section “What revenue are you planning to receive to your account(s) and what is the planned average monthly amount (specify in EUR)”:

  • In the event you will be transferred money from Lithuania, in the Questionnaire section “Domestic transfers” select an approximate average monthly amount you are planning to receive per month.
  • In the event you will be transferred money from foreign states, in the Questionnaire section “International transfers”:

    • indicate an approximate average monthly amount you are planning to receive per month;
    • indicate the number of planned international transfers, i.e. whether the number of such transfers will be less or more than three transfers per year;
    • specify foreign states from which you will receive international transfers;
    • specify the purpose of the international transfers, t. y. the aim of the money you are planning to receive from foreign states.
  • In the event cash will be deposited to your bank account through ATMs or in a Bank subdivision, in the Questionnaire section “Cash deposits” specify the amount of the deposits, i.e. whether it will be up to or more than EUR 15,000 per months. In the event the amount of the cash deposited will be more than EUR 15,000 per month, you have to specify the most frequent origin of the cash, i.e. where you are planning to receive cash from (for example, your parents or guardians will give you some cash, and you will want to deposit them to your account, or you may receive cash from your activities which you will want to deposit to your account).

Completion of the section “What operations are you planning to perform with your account(s) and what is the planned average monthly amount (specify in EUR)”:

  • In the event you are planning to transfer money to accounts in Lithuania, in the Questionnaire section “Domestic transfers” select an approximate average monthly amount you are planning to transfer.
  • If you are planning to transfer money to foreign states, in the Questionnaire section “International transfers”:

    • indicate an approximate average monthly amount you are planning to transfer;
    • indicate the number of planned international transfers, i.e. whether the number of such transfers will be less or more than three transfers per year;
    • specify foreign states to which you will make international transfers;
    • specify the purpose of the international transfers, t. y. the aim of your transfers of money to foreign states.
  • In the event cash will be withdrawn from your bank account through ATMs or in a Bank subdivision, in the Questionnaire section “Cash withdrawals” specify the amount of the withdrawals, i.e. whether it will be up to or more than EUR 15,000 per months. In the event the monthly amount of cash withdrawals exceeds EUR 15,000 per month, you have to indicate the most frequent reason for cash withdrawals, i.e. the most frequent use of the money you withdraw from your bank account.

If you do not have certain information or you are not sure, ask your parents or guardians.

“TYPES OF ACTIVITIES”

In the event you are engaged in individual activities, in this Questionnaire section specify the type of activities and the planned average monthly turnover of the activities.

If you do not have certain information or you are not sure, ask your parents or guardians.

“POLITICALLY EXPOSED PERSONS, THEIR CLOSE FAMILY MEMBERS AND CLOSE ASSOCIATES”

In the event one of your parents, guardians, brothers, sisters, as well as spouses of these persons currently occupy or have occupied within the last 12 months important public positions, you have to indicate this fact in this section of the Questionnaire. In this case you must also specify in the Questionnaire section the full name, personal number, position of this person as well as the institution where this person works, the last date of his position (if you know it) and the country, where this person is a politically exposed person.

If you do not have certain information or you are not sure, ask your parents or guardians.

“OTHER INFORMATION”

If you are a student, in the section “Position” indicate “Student”.

You can always use the possibility to consult with the Bank employees. You can do this by calling to the 1884 or by visiting any subdivision of the Bank.

We ask our clients or their representatives to provide information about the fact that they or their family members (spouse, co-habiting partner, parents, siblings, children and children’s spouses, children’s co-habiting partners), close associates (persons with whom a person has common business, keeps professional or business relationship) presently occupy or in the recent 12 months have held an important public position in any state and/or international institution since the bank has to conduct enhanced monitoring of business relationship / monetary transactions of such clients.

Important public position shall be considered the following:

  • Head of the State, Head of the Government, a minister, a vice minister or a deputy minister, State Secretary, the Chancellor of the Parliament, Government or Ministry
  • Member of the Parliament
  • Member on the Supreme Court, the Constitutional Court or any other judicial authority, whose decisions are not subject to further appeal
  • Mayor of the municipality, director of the municipal administration
  • Member of the management body of the national supreme audit and control institution, the chairperson, deputy chairperson or a member of the board of the central bank
  • Ambassador, chargés d’affaire, Chief of Defence of the Republic of Lithuania, commanders of the armed forces and units, Chief of the Defence Staff or high-ranking officer in the armed forces of foreign country
  • Member of the management or supervisory body of a state enterprise, public company, private company all or part of shares of which awarding more than ½ of all votes in the general meeting of shareholders of these companies are held by the State by right of ownership
  • Member of the management or supervisory body of a municipal enterprise, public company, private company all or part of shares of which awarding more than ½ of all votes in the general meeting of shareholders of these companies are held by the State by right of ownership and which are considered to be large enterprises within the meaning of the Law of the Republic of Lithuania on Financial Reporting by Undertakings
  • Head, deputy head, member of the administrative, management or supervisory body of international intergovernmental organization
  • Leader, deputy leader, member of the administrative, management body of the political party

Please not that if you are a family member or immediate helper of a politically exposed person, you must supply the required information about this politically exposed person.

In order to get to know our customers and to maintain a business relationship based on mutual trust, we ask our customers to cooperate with us and with other responsible authorities (such as the State Enterprise Registers Centre), updating and providing relevant information about themselves, including accurate contact information, in case it is necessary to contact them.

Important! If you do not complete the Customer Questionnaire for Natural Persons and submit it to us on time, we will not be able to provide you with some of our services, or maybe not any of them. This means that there may be limitations on the use of your bank account, your payment card(s), the Swedbank internet banking page and smart app; and other services may also be withheld from you. You will be able to resume using our services when you complete the Customer Questionnaire for Natural Persons and submit it to us. You will find more information in the General conditions of dealing with and servicing the customers.

Only together with our customers we can ensure the sustainability of the finance system. Therefore, we sincerely invite customers of our bank to join in the effort to create a sustainable finance system, by providing us with up-to-date information and drawing attention to suspicious activity, which may be associated with money laundering or terrorist financing. By sharing information with us, you help us to be better prepared to discover and to block the way of illegal activity.

Money laundering is activity aimed at hiding or obfuscating the true source of illegally obtained funds or other assets.

Terrorist financing is providing financial assistance in any form for the purpose of terrorist activity or to individuals who plan and foment terrorist activity, or who lead it.

We are taking all essential measures to block the path of this illegal activity.

International and Republic of Lithuania legislation provide a requirement for banks to implement the “Know Your Customer” principle in relation to new and current customers, specifying that banks have a duty to:

  • know what activities the customer is engaged in (what is the nature of his business), analyse his activities;
  • know who the beneficiaries of the customer are, i.e. natural persons in whose interests or for whose benefit the transactions or activities are carried out (the beneficiary of a legal identity is determined on the number of natural person(s), regardless of the number of controlling legal entities);
  • to carry out regular monitoring of the customer’s business relations, including examination of transactions concluded during such relations, to ensure that the executed transactions correspond to the bank’s knowledge of the customer and his business (type and nature of business, nature of transactions, business partners, field of operations, etc.) and the nature of the risk. Payment transactions are also considered to be transactions;
  • to understand the source (origin) of the customer’s funds.

The above-mentioned obligation to conduct a transaction ivestigation the bank can perform only after receiving from the customer explanations ragarding the operations performed on the customer's account and documents substantiating such operations, confirming the explanations provided by the customer.

The bank must also ensure that the money laundering and terrorist financing risk assessment is based on up-to-date and accurate information, and it must therefore regularly review and update the documents, data and information provided during the identification of the customer and the beneficiary. This provision applies not only to new but also to existing bank customers. The customer must notify the bank about any changes in this data.

When a customer is establishing business relations with a bank, the customer must fill out, as appropriate, Customer Questionnaire for Natural Persons or Customer Questionnaire for Legal Entities. These documents also need to be completed when updating information about the customer.

The bank shall ensure that the information provided by the customer and the data related to their business relations are protected in the same way as any other information constituting a bank secret. The main document regulating bank secrecy is the Republic of Lithuania Law on Banks of the (Article 55). The relationship between the bank and the customer due to the bank’s secrecy requirements is also regulated by the General conditions of dealing with and servicing the customers, as well as the Principles of personal data processing.

The principle Republic of Lithuania laws that set the requirements in the field of prevention of money laundering and terrorist financing are:

  • Republic of Lithuania Law on the Prevention of Money Laundering and Terrorist Financing (and other legislation subsequently adopted on this foundation);
  • Decision No. 03-17 of 12-02-2015 of the Board of the Bank of Lithuania to approve instructions to Finance market participants, seeking to block the path to money laundering and/or terrorist financing (new version No. 03-15 of 30-01-2020).

You can get more information about the legislation that regulates money laundering on the website of the Financial Crimes Investigation Service under the Republic of Lithuania Ministry of Internal Affairs http://www.fntt.lt.

All current Republic of Lithuania laws are publicly available at the website www.lrs.lt.

Banks are bound by very strict legal requirements to implement the “Know Your Customer” principle and to reduce the various risks associated with illegal activities. The implementation of the “Know Your Customer” principle is linked to the application of international measures to prevent money laundering and terrorist financing. Banks must ensure that their infrastructure is not used by individuals who pose a threat to others and must therefore ensure that the origin of the customer’s assets and funds is transparent, that monetary transactions are understandable, economically sound and in line with declared activities. Yes, national and international legislation obliges all the country’s banks to apply the “Know Your Customer” principle.

If the bank is not provided with the necessary information or requested documents (and even if they are provided, but they do not answer the questions), in some cases the bank will no longer be able to provide you with services, e.g. it may refuse or suspend the execution of monetary operations or transactions, or apply restrictions on the use of the account, card(s), Internet banking.

Please note that the money in your account will not disappear, but you will be able to use the bank’s services only after you provide the necessary information or documents. In addition, if the bank does not receive the required information (or requested documents) from you, it may terminate its business relationship with you.

Information about customers (identity data, accounts, deposits, etc.) and their transactions received by the bank when providing financial services under the respective agreement is considered a bank secret and is protected in accordance with Republic of Lithuania legislation. The main document regulating bank secrecy is the Republic of Lithuania Law on Banks (Article 55). The relationship between the bank and the customer due to bank secrecy is also regulated by the General conditions of dealing with and servicing the customers, as well as the Principles of personal data processing. The bank may disclose information constituting a bank secret only to the customers themselves or their legal representatives, as well as to the authorities and other persons, as provided for in the Republic of Lithuania Law on Banks, and in the above-mentioned conditions and principles. A request for data does not mean that you are suspected of anything. Banks do not collect customer data on their own initiative, but because they are required by law to do so. This is a routine process and these requirements apply to all customers. This could be compared to airport security checks, where all passengers are screened pre-flight, for general security reasons.

We ask for this information in order to remove any doubts regarding money laundering, terrorist financing and so on. Quite often, fraudulently obtained funds are transferred to third parties and cash is immediately withdrawn. As a result, we constantly monitor all monetary transactions made through our infrastructure, regardless of the specific amount.

Most of our customers are not involved in any illegal activities and should not have to worry about such inquiries. However, by working with us, they help us to identify real violations more effectively.

The section indicating the purpose of the payment is required not only to provide the payee with the information on the payment, but also to explain to the bank (as a service provider) the real purpose of this monetary transaction. We expect proper business communication from our customers, and we are grateful for it; therefore, we advise you to avoid ambiguities when specifying the purpose of payment, and to specify the purpose of payment precisely. In order to get to know our customers and to maintain a business relationship based on mutual trust, we ask our customers to cooperate with us and with other responsible authorities (such as the State Enterprise Registers Centre), updating and providing relevant information about themselves, including accurate contact information, in case it is necessary to contact them.

Swedbank maintains strict ethical and moral standards in its work and it collaborates with customers whose funds and assets are legitimate, with no doubts about its legality. What we expect from our customers is:

A customer’s activities must be shown and explained in the appropriate Customer Questionnaire for Natural Persons or Legal Entities, as required. It is also important that all customer’s transactions done using our infrastructure match the customer’s activities and/or their usual behaviour and the information that the customer has supplied to the bank.

A transparent source of funds means that the customer has documents showing the legality of the funds acquired by him or a legal entity that he controls, and if required these documents can be produced for the bank.

The concept of ‘source of funds’ means the specific origin of the funds that were used or may be used for a specific payment or transaction.

In our business dealings with a customer, we take into account negative publications or other public information about natural persons and legal entities. This includes any adverse information provided in various news sources.

We also encourage our customers to choose their business partners carefully, as through these partners our customers may be unknowingly implicated in money laundering schemes or in maintaining business relations with sanctioned entities. As a result, customers can risk their own reputation.

We expect our customers not to enter into transactions with legal entities or natural persons unrelated to that particular transaction. As companies registered in offshore jurisdictions (e.g. Belize, Panama, etc.) or limited liability (LP/LLP) companies (e.g. registered in the UK, Scotland, Canada) are at high risk of being involved in money laundering schemes, we do not accept transactions with such entities.

General information abouy international sanctions

International Sanctions are restrictive non-military measures put in place in order to preserve the international peace and security, as well as respect for human rights.
They are imposed by the United Nations (UN), the European Union (EU) or by individual countries (e.g. the United States (U.S.)). International Sanctions are imposed against entire states, as well as natural persons and legal entities, who violate the human rights, commit religious, ethnical, territorial conflicts, support terrorism, violate other international norms and principles.
The purpose of International Sanctions is to influence a change of behaviour, to stop prohibited activities or to restrain the sanctioned person. International Sanctions take various forms based on their purpose objective (e.g. to prevent armed conflict, counter terrorism). They can be individual (e.g. travel ban, asset freeze), target goods and services (e.g. arms embargoes or proliferation-related goods, dual-use goods), can be focused on core economic sectors (e.g. oil or financial sectors) or be comprehensive targeting entire country (e.g. North Korea).
Swedbank, as well as other financial institutions, implements International Financial Sanctions. It has to be pointed out that depending on the countries where the financial institutions operate, the lists of sanctions which the financial institutions follow could slightly differ.

  • UN sanctions. All UN members are obliged to accept and carry out Resolutions passed by UN Security Council.
  • EU sanctions. Sanctions are implemented through EU Council Regulations and have direct effect in all EU member states.
  • Swedbank also implements relevant U.S. Financial Sanctions based on the Swedbank Group Policy on Financial Sanctions.S. Financial Sanctions are imposed by U.S. President Executive Orders and implemented by the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury.

By following U.S. Financial Sanctions, Swedbank is being able to keep and maintain relations with banks in U.S. jurisdiction and provide to its customers transactions and other products/services in USD currency or transactions related to U.S. persons.

Links:

Swedbank implements above mentioned International Sanctions to the extent determined by the UN, the EU, the U.S. or state bodies (i.e. Government) and according to the Swedbank Group Policy on Financial Sanctions. Additionally, Swedbank considers correspondent banks requirements, as well as its own risk appetite. Therefore, Swedbank will not engage in any actions that directly or indirectly evade the Financial Sanctions prohibitions, correspondent banks requirements and Swedbank’s internal decisions.

Below are provided major types of International Sanctions implemented within Swedbank:

  • Arms embargoes/restrictions on dual-use goods and technology and related activities for military purposes (Defence sector). The same embargoes/restrictions can be imposed also for other goods (e.g. equipment used for internal repression, telecommunications’ monitoring and interception equipment). Swedbank is obliged not to participate in provision of financial assistance related to mentioned goods or related services.
  • Core economic sector sanctions – Sectorial Sanctions. Financial and energy sectors of the Russian Federation are affected by this type of sanctions:
    • Restrictions to provide access to capital markets and restrictions to issue new loans or credits to companies under Sectoral Sanctions (EU and U.S.);
    • Restrictions on certain items used in the oil industry (EU) and restrictions on goods/services for projects that have potential to produce oil in any location (U.S).

    Swedbank will not provide any financial services restricted (e.g. loans, credits, dealings in financial instruments), as well as will not participate in any transactions related to prohibited activities (e.g. restrictions on provision, exportation, or reexportation of goods/services or technology in support of exploration or production for deepwater, Arctic offshore, or shale projects that have the potential to produce oil).

  • Comprehensive sanctions against defined countries/regions.g. North Korea is comprehensively sanctioned by the UN, the EU and the U.S.

It is important to mention that the asset freeze and some sectoral restrictions are also applicable to legal entities that are owned or controlled, directly or indirectly, by a designated person. Although those legal entities may not be designated and included into sanctions lists, the same sanctions are applicable for them and needed to be implemented by Swedbank.

EU imposed International Sanctions (including implemented UN sanctions) apply within the territory of EU and to all EU persons inside or outside the territory of EU. Thus, both financial institutions and their customers are legally responsible for complying with the EU sanctions and have the obligation to inform the competent authorities on the cases they know or suspect transactions with sanctioned subjects. Swedbank will always inform the competent authorities in case of breach of the EU Sanctions and freezing of funds. Examples when reporting is necessary:

  • The customer identifies that its partner or customer is the EU sanctioned person;
  • The customer identifies that beneficial owner of the legal entity which buys goods/services is the EU sanctioned person;
  • Etc.

As a low risk bank, Swedbank expects that its customers are aware of their business exposure towards International Sanctions, in order to avoid measures which could negatively affect their activities.

When the business activities extend to foreign countries, Swedbank advises its customers to assess potential risks related to International Sanctions before involving themselves in business relationships or transactions. Even if no embargoes or restrictions are imposed against a particular country, Swedbank recommends to evaluate if goods/services could be made available to or for the benefit of a sanctioned subjects. It is prohibited to make available funds or other assets to sanctioned subjects directly or indirectly.

International Sanctions are generally widely publicised, and customers have to understand and take actions regarding International Sanctions that might be relevant for them. Therefore, in case business activities involve foreign countries, in order to better mitigate the risks related to International Sanctions Swedbank advises its customers to take appropriate risk-mitigation steps:

  • to check what UN, EU and U.S. sanctions, as well as sanctions imposed by the local country are applicable for the particular country;
  • to perform due diligence on their partners and customers;
  • to discuss sanctions with their partners and customers;
  • to consult responsible authorities or seek independent legal advice in case of any questions or doubt related to implementation of International Sanctions.

Due to International Sanctions, Swedbank’s internal decisions and correspondent banks requirements, Swedbank has the right not to execute transactions (including crediting of funds) in any currencies related to the EU and U.S. comprehensively sanctioned countries/regions:

  1. Iran;
  2. Syria;
  3. North Korea;
  4. Crimea, Sevastopol.

Swedbank may also hold the customer’s transaction to/from any country/region where embargoes, other restrictive measures are imposed or to/from other high-risk countries/regions in order to investigate whether this transaction is not related to International Sanctions and is in line with correspondent banks’ requirements, as well as with Swedbank’s internal decisions and its own risk appetite. The execution of stopped international transactions may be delayed and customers may be asked to provide additional information and/or documents about their transactions because of such investigation.

The list of countries/regions inter alia includes (the provided list is not full as International Sanctions, as well as Swedbank’s internal decisions can be imposed/revoked over the time):

  1. Cuba;
  2. Iraq;
  3. Myanmar (Burma);
  4. Libya;
  5. Sudan and South Sudan;
  6. Yemen;
  7. Somalia;
  8. Transnistria region;
  9. Lugansk/ Donetsk;
  10. Etc.

In assessing if transaction is related to the above-mentioned countries/regions Swedbank will investigate connections to imposed International Sanctions and analyse additionally:

  • If transaction is related to a counterparty located or operating in one of the above-mentioned countries/regions. The relation could be direct (e.g. transaction is received from the sender with the address in Crimea) or indirect (e.g. transaction is received from other country (e.g. Turkey) but goods are being sent to Syria);
  • If transaction is related to front companies which help to avoid direct connection to the above-mentioned countries/regions;
  • If information provided in transaction details could be linked to the above-mentioned countries/regions (e.g. person name, vessel, name of city, harbour etc.);
  • If transaction lacks a substantial information to understand the transaction’s purpose;
  • Etc.

Additional observations

Swedbank would like to draw your attention to the fact that the term of executing international transaction (including crediting of funds) may be extended, or international transaction may be blocked or frozen by other banks which also participate in the execution of transaction (correspondent bank, bank of beneficiary or sender). Therefore, the customers should always evaluate potential International Sanctions risks by themselves.

Swedbank would like to draw your attention to the fact that both the EU and the U.S. imposed broad (comprehensive) International Sanctions related to Crimea and Sevastopol regions. These sanctions cover restrictions and prohibitions on imports, exports, investments and financing in relation to these regions.

Due to the current situation, Swedbank’s internal decisions and correspondent banks requirements, Swedbank will not, as a rule, perform international transactions (both outgoing and incoming) to these regions or related to these regions (e.g. beneficiary address is indicated in Crimea) in any currencies.

There are restrictive measures (Sectoral Sanctions) adopted by the EU and the U.S. on access to the capital market and new credits to defined Russian banks (i.e. Gazprombank, the Russian Agricultural Bank, Sberbank of Russia, Vnesheconombank, VTB Bank etc.). Swedbank has to ensure that international transactions related to the mentioned banks do not violate restrictions imposed. Therefore, Swedbank could conduct additional investigations on related transactions. As transactions associated with concealed financing are difficult to detect the fulfilment of the payment order may be delayed.

Both the EU and the U.S have imposed sanctions against the administrative bodies of the Lugansk and Donetsk regions, as well as subjects closely linked to such bodies. Execution of transactions, the addresses and details of which contain any reference to the respective regions and subjects registered there, may take more time or their execution may be refused, due to the restrictions and prohibitions in place.

Military goods cover military technology and equipment which might be used for internal repression or international aggression or contribute to regional instability.

Dual-use goods are items, including software and technology, which can be used for both civil and military purposes, and shall include all goods which can be used for both non-explosive uses and assisting in any way in the manufacture of nuclear weapons or other nuclear explosive devices.

Usually when arms embargoes/restrictions on dual-use goods are imposed, related technical, financial assistance, as well as other services are also prohibited. Although the primary responsibility for the classification of goods and technologies lies with the customers sending or receiving such items, the prohibition to provide financial assistance is also mandatory for financial institutions, it means for Swedbank as well.

The prohibition on military goods/dual-use goods means that Swedbank cannot participate in any financial transactions, provide business support or any financial support to customers that sell, supply, transfer, mediate or export such goods to restricted countries/regions (e.g. the Russian Federation), if they are intended for military purposes, or sell, supply, transfer or export such goods to the certain EU listed subjects. Therefore, Swedbank could conduct additional investigations on related transactions. Thus, the fulfilment of the payment order may be delayed.

There are items related to energy sector listed by EU which are restricted to be exported to the Russian Federation. U.S. has imposed restrictions on all goods/non-financial services or technology in support of energy projects. Therefore, Swedbank must be aware if the customer has an authorization from authorities in order not to be involved in prohibited transactions.

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If Swedbank requests you to provide information/documents and received information/documents will not include all necessary information, the fulfilment of the payment order might be delayed.

Swedbank does not tolerate situations when transaction data (i.e. beneficiary’s name/surname, address, etc.) is altered or stripped in order to bypass Swedbank risk mitigation measures or conceal potential links with subjects to International Sanctions.

Therefore, if your company operates in countries, which are included in Swedbank’s binding sanctions lists, you may be required to submit information regarding risks related to International Sanctions internal control system measures taken within your company.

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