Klarna hit with £35M fine after breaking AML rules

Klarna has been fined over £35m (500m Swedish crowns) by the Swedish financial regulator after it broke anti-money laundering rules.

The regulator slammed “significant deficiencies” in Klarna’s risk controls.

It probed Klarna’s compliance with AML regulations during the period April 1 2021 and 31 March 2022.

Sweden’s Financial Supervisory Authority (FI) said the Swedish BNPL firm- which recently filed for an IPO in the US- had been in “violation” of several key rules.

It said Klarna's risk assessment has had “significant deficiencies”, saying it had not contained any assessment of how the bank's products and services could be used for money laundering or terrorist financing.

The regulator also said Klarna did not have “procedures and guidelines that capture all situations for when due diligence measures should be taken for customers that use Klarna's invoice product”.

Daniel Barr, director general, FI, the Swedish regulator, 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,"

But the regulator said the violations were not so severe as to issue a warning to Klarna or withdraw authorisation. Instead, it hit Klarna with a 500m Swedish crown fine.

In response, Klarna said: “The decision from the SFSA follows a routine review, initiated in 2022, of Klarna's compliance with anti-money laundering regulations—not actual cases of money laundering. We have maintained constructive dialogue throughout this process which is part of our commitment to a robust and secure financial environment."