Sweden’s financial regulator, the Financial Supervisory Authority (FI), has imposed a fine of 500 million Swedish crowns ($46m) on BNPL firm Klarna for breaches in anti-money laundering regulations.
The investigation, which spanned from 1 April 2021 to 31 March 2022, revealed shortcomings in Klarna’s risk assessment and customer due diligence processes.
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The FI’s probe determined that Klarna’s general risk assessment failed to adequately evaluate the potential use of its products and services for money laundering or terrorist financing.
Furthermore, Klarna lacked procedures and guidelines for implementing due diligence measures, particularly concerning customers using its invoice product.
Despite these violations, the FI concluded that they did not warrant a formal warning or the withdrawal of Klarna’s authorisation.
Instead, the regulator has issued a remark and an administrative fine, taking into account the nature of the infractions and Klarna’s financial standing.
Klarna, which is anticipated to launch an initial public offering (IPO) next year after filing paperwork with the US Securities and Exchange Commission, has acknowledged the fine.
The company responded that it continues to develop and strengthen their processes together with the Financial Supervisory Authority and other stakeholders.
FI director general Daniel Barr said: “The anti-money laundering regulations must be followed. It is important to counteract the risk that the firm’s operations could be used by criminals. Our investigation shows that Klarna has not followed the requirements on, among other things, a general risk assessment and procedures and guidelines for due diligence measures. There are therefore grounds on which to intervene against the bank.”
