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Wednesday, June 19, 2024

Crime unit probes cash redemption

Various denominations of Norwegian currency printed as far back as 1979 will be rendered worthless as of November 1. Norway’s economic crimes unit Økokrim is closely following the redemption now going on all over the country, to be on the lookout for money laundering.

This version of a 1,000-kroner note, printed between 1990 and 2001, is believed to account for 75 percent of the old currency still outstanding. PHOTO: Norges Bank

Newspaper Dagens Næringsliv (DN) reported that several banks nationwide have reported suspicious transactions, as people arrive with large bundles of the old kroner-bills to redeem them for newer ones. Around NOK 140 million (USD 25 million) worth of old currency has been redeemed since New Year, with nearly NOK 20 million turned in just during the past two weeks.

“These are sedler (banknotes, bills) that folks have had lying around for a long time without using them,” Anna Haugmoen Mo, leader of Økokrim’s money laundering investigators, told DN. “There is reason to ask where the money has come from.”

Lots of the old cash may simply have been stashed under mattresses or in drawers by ordinary Norwegians who either don’t trust banks, prefer to keep their savings in their homes or want to reduce or avoid Norway’s controversial formueskatt (a “fortune tax” assessed on individual net worth). All banks in Norway must report the balances of all accounts to state tax authorities and the amount is included in Norwegians’ fortune tax liability. If the money is instead stashed away at home instead of in the bank, individuals can then opt against declaring it, although they risk prosecution for doing so.

This 500-kroner note is also about to be recalled. PHOTO: Norges Bank

Norway’s Central Bank (Norges Bank), which is recalling the old currency series, estimates as much as NOK 632 million worth of the old money is still out among the public and will be rendered worthless by the end of this week unless it’s turned in and exchanged. Some of it may have been collected through criminal activity, though, and that’s what the police hope to detect.

“Folks who are sitting on money that stems from illegal activity are in an awkward situation,” Mo told DN. “They  have to redeem the money to retain its value, but the redemption can be registered by the banks.”

She compared the situation to what happened in many European countries that adopted the euro and rendered their own currency worthless.  The prospect of forced currency redemption led to a lot of trade in gold, diamonds and art that was bought with cash about to be withdrawn from circulation, she said, and suspicions that the cash amounted to ill-gotten gains.

The Norwegian cash being withdrawn includes 50-, 100-, 500- and 1,000-kroner notes printed until 2001. Norges Bank estimates that around 75 percent of the outstanding currency consists of the 1,000-kroner notes featuring a picture of Christian Magnus Falsen, known as the father of the Norwegian constitution.

For more photos of the cash being recalled, click here (external link).

The bank has been issuing warnings to Norwegians that the money is about to become worthless, urging them to search through drawers, cupboards and safe deposit boxes where money may have been hidden.

Large transactions that spark the interest of investigators at Økokrim can also be reported further to tax authorities, who are always on the lookout for undeclared income and fortune.

Views and News from Norway/Nina Berglund

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