29 November, 2018
COPENHAGEN – On Wednesday, Denmark’s largest lender Danske Bank, announced that it had been preliminarily charged for violating anti-money laundering laws relating to a scandal surrounding its Estonian branch.
The Danish state prosecutor filed four charges of violating AML laws in the period from 1 Feb 2007 to the end of January 2016 when $233 billion was laundering to the accounts of non-Estonian customers at the branch.
The four preliminary Danish charges included allegations that the bank:
- had inadequate controls, staff were not trained in anti-money-laundering procedures and nobody was responsible for compliance at management level for some time
- failed to integrate the Estonian branch into its central risk system and check customers’ identities properly
- failed to check the source of customer funds and whether they posed an increased risk of money laundering and terrorism financing
- should have investigated and reported suspicious transactions several years earlier.
General prosecutor Morten Niels Jakobsen said in a statement that they are “working intensively with the investigation” and will seek to clarify whether criminal charges can be pursued against the bank or if individuals can be held responsible.
Acting Chief Executive of Danske Jesper Neilsen said that the bank has expected the charge and will cooperate with the investigation.
“In recent years, we have taken a number of initiatives, and the situation is now quite different from what it was at the time of the suspicious activities in Estonia. We will continue to give high priority to this area,” he said.
Danske Bank published its own report in September around suspicious flows of money through the Estonian branch. Former CEO Thomas Borgen resigned and Chairman Ole Andersen subsequently agreed to quit under pressure from major shareholders.
Meanwhile, the EU has adopted tougher rules on money laundering thanks to several high-profile scandals involving large banks. The Danske Bank money laundering case was cited as the “the biggest scandal” to occur in Europe.
Never miss a news update: Subscribe to our newsletter