Klarna, the Swedish buy-now-pay-later provider, has been fined Skr 500m ($45.6m) for violating anti-money-laundering (AML) regulations.

The fine was levied by Finansinspektionen, the Swedish Financial Supervisory Authority, after an investigation into Klarna’s compliance measures connected with AML regulations, risk requirements, and customer due diligence between April 1, 2021 and March 31, 2022.

In the investigation, the Financial Supervisory Authority found multiple violations of key rules, including significant deficiencies in the company’s general AML risk assessment – such as it not having any assessments in place on how its products and services could be used to launder money or to finance terrorism.

Klarna was also found to have failed in having adequate procedures and guidelines in place in connection with due diligence measures for those customers that used Klarna’s invoice product.

“The industry navigates a complex set of regulations … all other major banks have received reprimands within the framework of the money laundering regulations.”

Klarna

“The money laundering rules must be followed. It is important to counteract the risk that the company’s operations can be exploited by criminals. Our investigation shows that Klarna has not followed the requirements for, among other things, general risk assessment and routines and guidelines for customer awareness measures. It is therefore justified to intervene against the bank,” said Daniel Barr, director general at Finansinspektionen.

However, the Financial Supervisory Authority said that the violations were not serious enough for it to consider withdrawing the bank’s authorization or issuing a warning.

No cases of money laundering

In a statement, Klarna addressed the fine and emphasized that the decision was brought in connection to rule interpretation and application – and not because any cases of actual money laundering had been found.

“The industry navigates a complex set of regulations, which is also demonstrated by the fact that all other major banks have received reprimands within the framework of the money laundering regulations. We continue to develop and strengthen our processes together with the Financial Supervisory Authority and other stakeholders,” Klarna said, and added that it has had constructive dialogue with the authority since the investigation stared in 2022.

Second fine in 2024

This is the second fine for Klarna this year. In March, Klarna was fined Skr 7.5m ($733,324) by IMY (the Swedish Data Protection Authority) for violating the EU’s GDPR by not providing adequate information to its users.

In that case the company was found to have failed to provide customers with information about how it stored users’ personal data, with information on this either unclear or hard for users to access.

“Klarna is a financial company that processes personal data about many people and in many different ways. It is important that the information that Klarna provides about how the company processes personal data is correct and as complete as possible. We have seen shortcomings here”, said lawyer Hans Kärnlöf.