By Dominic Chopping

 

STOCKHOLM--A group of seven Nordic banks Wednesday launched a new initiative that will see them implement new rules on lending to the construction sector in an effort to fight financial crime.

The initiative will see a set of guidelines implemented later this year in Sweden at Danske Bank AS, Svenska Handelsbanken AB, Nordea Bank Abp, SBAB Bank AB, Skandinaviska Enskilda Banken AB, Sparbankerna and Swedbank AB.

"Financial crime and illegal labour in the construction industry lead to significant negative effects for society, in the form of a loss of tax income and difficulties monitoring whether human rights are respected at construction sites," Handelsbanken said.

"In their role as a credit provider to construction companies and property companies, banks have the capacity to make a difference through the terms and conditions they apply to their lending."

Each bank has its own processes to prevent products and services from being exploited for financial crime and this initiative introduces new requirements on borrowers as part of the banks' credit processes.

The banks have agreed on uniform guidelines in lending to construction companies and property companies which aim to ensure that borrowers have control over production and achieve greater oversight of the labour used throughout all supply chains, as well as guaranteeing that any sub-contractors comply with all applicable regulations.

 

Write to Dominic Chopping at dominic.chopping@wsj.com

 

(END) Dow Jones Newswires

April 14, 2021 03:37 ET (07:37 GMT)

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