Money laundering and financing of terrorism
Published: 13 September 2022
The purpose of money laundering is to disguise the origin of proceeds of crime by integrating the funds into the legal economy, thus making them appear legitimate. The financing of terrorism entails aiding and abetting a terrorist act or supporting a terrorist organisation.
About money laundering and financing of terrorism
Proceeds from criminal acts can be money generated by organised crime, such as drug trafficking, robbery, prostitution, human and/or arms smuggling, or by other forms of crime, such as embezzlement, tax evasion, fraud or corruption.
When crime generates proceeds, the perpetrators must find ways to integrate the funds into the economy without attracting attention to themselves or the criminal act. The proceeds are laundered by obscuring the origin of the funds.
Terrorism can be financed by funds of both legal and illegal origin. Terrorist acts are often financed by a combination of savings, legitimate income, legitimate and illegitimate fundraisers and various forms of criminal activity, such as loan fraud.
The anti-money laundering (AML) legislation aims to prevent and identify transactions associated with proceeds of crime or the financing of terrorism. One of the requirements of the AML legislation is that banks and other obliged entities must check information about potential customers when establishing customer relationships, and that established customer relationships must be followed up on an ongoing basis. Suspicious transactions made by customers must be reported to Økokrim (the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime).
A number of regulations on the implementation of sanctions and measures have been laid down and adopted by the UN and the EU, for example related to terrorist financing. These regulations apply alongside the AML legislation and also include obligations to be met by entities under supervision.
Finanstilsynet's role in the work against money laundering and terrorist financing
A number of obliged entities, as defined in the AML legislation, are under supervision by Finanstilsynet.
An entity that fails to meet its obligations under the Anti-Money Laundering Act can be penalised with a fine. This applies to both non-compliance with rules on customer due diligence and failure to report suspicious transactions to Økokrim.
Finanstilsynet oversees that obliged entities under supervision comply with the obligations under the AML legislation. Finanstilsynet may issue orders for corrective measures to non-compliant entities. In serious cases, Finanstilsynet may report the entity to the police.
Other authorities’ role in the work against money laundering and terrorist financing
General notes on the division of responsibilities between different authorities
Responsibility for anti-money laundering and counter-terrorist financing in Norway is shared between several ministries and underlying government agencies, primarily the Ministry of Justice, the Ministry of Foreign Affairs, the Ministry of Finance, the Police Directorate, Økokrim, the Norwegian Police Security Service and Finanstilsynet. In order to ensure coordinated efforts against money laundering, terrorist financing and financing of the proliferation of weapons of mass destruction, a cross-disciplinary contact forum has been set up with representatives from, among others, the ministries, the police and Finanstilsynet.
Økokrim’s Financial Intelligence Unit (FIU) handles reports on suspicious transactions. The FIU reviews the reports and forwards relevant information to the police, including the Police Security Service (PST), administrative bodies with control responsibilities and other countries' supervisory bodies.
PST aims to prevent terrorism and terrorist financing from taking place in and from Norway, and to prevent that Norway is used as a transit country for money for terrorist purposes.
The website hvitvasking.no provides information about the work against money laundering and terrorist financing. The content is available in Norwegian only. On the website, obliged entities can find:
- Information about reporting of suspicious transactions
- The UN’s consolidated list of natural and legal persons subject to UN sanctions.
- Decisions on asset freezing made by a public prosecutor or PST and court orders from the District Court, notifying decisions to uphold or extend a decision to freeze funds.
- Translations of announcements from the FATF, for example about regimes with inadequate efforts to combat money laundering and terrorist financing.
Financial Action Task Force (FATF)
The FATF is an inter-governmental cooperative body whose objective is to establish a common international approach to efforts to combat money laundering and terrorist financing. To achieve this, the FATF has issued 40 recommendations that member countries must comply with. The FATF also prepares guidance papers based on the various recommendations. The FATF’s website contains information on:
- The FATF's 40 recommendations
- Announcements from the FATF, for example about regimes with inadequate efforts to combat money laundering and terrorist financing.
- Statements on methods and trends
- Various guidance papers
Announcements from the UN and the FATF – registration for e-mail notification
In order to make sure that all institutions are updated on statements from the UN and the FATF and similar statements, as well as decisions to freeze assets, Finanstilsynet has established an e-mail alerting service. The institutions themselves are responsible for submitting the correct e-mail address to receive these alerts.
The email must include:
- entity name
- organisation number
- email address (es) for notification. The email address must not be a personal address, i.e. that it cannot be linked to an individual employed by the entity or be a private address. The email address must be generic, e.g. firstname.lastname@example.org.
- Subscription to and unsubscription from e-mail notification
- Guidance – asset freeze provisions
Announcements from the UN, FATF and EU
- The UN’s consolidated list of natural and legal persons subject to UN sanctions
- The EU’s consolidated list of natural and legal persons subject to EU sanctions