The banks say processing transactions to and from listed states costs more in terms of time and resources, hence a surcharge being applied, in most cases on private and business clients alike.

The surcharge requirement have already been put into effect at SEB and LHV, with charges reaching up to €100 for payments both to and from high-risk countries.

From November 1, Swedbank private and business clients will have to pay a €75 transaction fee on payments made to high-risk countries, though the fee is not levied on incoming payments for private clients.

"If a payment arrives in Estonia from some risk country, then no surcharge will be taken from the private client recipient – incoming payments will be settled under the usual conditions," Swedbank's head of communications Martin Kõrv told ERR.
Business clients must pay the €75 fee also on incoming payments, even if the incoming sum is lower than that €75.

Ainar Leppänen, SEB board member and head of the bank's client risk management and security, said that their surcharge applies solely to business clients and is automatically added to a foreign payment fee in its price tariff. SEB is applying the surcharge due mainly to various sanctions making processing payments to risk countries much more time- and resource-intensive.

This is also the case with Swedbank, Kõrv noted, saying: "Firstly, such regions are often connected to greater financial or political instabilities, which forces banks to apply additional security measures and risk assessment procedures to protect themselves from possible financial crimes, such as money laundering or terrorist financing."

Many countries also have strict regulations and supervision, which require banks to exercise enhanced due diligence when it comes to such transactions. According to Kõrv, this again means more documentation and checks, which in turn hikes the cost of providing the service.

"In high-risk regions, exchange rates are often more volatile, and this brings a greater currency risk for banks," he noted, pointing out that in some high-risk countries there may also be restrictions on international financial services or difficulties in cooperating with local partners.

"These factors, taken together, make the processing of payments to high-risk countries more expensive both for us and for the client. Therefore, these aspects are reflected in higher service fees," Kõrv said.

Swedbank's list of high-risk countries is considerably longer than SEB's. Swedbank includes all states on the EU's list of high-risk third countries and on the international anti-money-laundering task force's lists as high-risk or monitored countries. High-risk states include those under financial and trade sanctions, as well as those with a high risk of sanction evasion, in Swedbank's understanding.
Swedbank said it relied not only on EU and international lists and regulations, but also on its own risk assessment, when compiling the list.

Swedbank's list of high-risk countries, to which the €75 surcharge on payment transfers is applied, consists of: Algeria, Angola, Armenia, Azerbaijan, Barbados, Bolivia, Burkina Faso, Cameroon, the Democratic Republic of Congo, Ivory Coast, Georgia, Haiti, Iraq, Jamaica, Kazakhstan, Kenya, Kyrgyzstan, Laos, Lebanon, Liberia, Mali, Mozambique, Myanmar, Namibia, Nicaragua, Nigeria, Niger, Pakistan, Panama, the Philippines, Samoa, Senegal, Serbia, South Africa, South Sudan, Suriname, Tajikistan, Tanzania, the Republic of Trinidad and Tobago, Turkmenistan, the United Arab Emirates, Uganda, Uzbekistan, Vanuatu, Vietnam, Yemen.

SEB applies its surcharge to payments made to: Armenia, Azerbaijan, Georgia, Kazakhstan, Jordan, Kyrgyzstan, Moldova, Serbia, Tajikistan, Turkey, Turkmenistan, the United Arab Emirates, and Uzbekistan.

Lists of risk countries can be subject to change over time.

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