Danske Bank money laundering  could have been stopped years ago

Over the last nine years, 200 billion euros worth of dirty money passed through the Estonian branch of the Danish bank, Danske Bank. But apparently, Estonian authorities have been aware of irregularities in the branch for over a decade.

Marian Männi
Marian Männi Eesti Ekspress, Estonia
Source: Eesti Ekspress
Danske Bank money laundering  could have been stopped years ago - NewsMavens
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Why this story matters:

The European Commission recently dubbed Danske Bank's money-laundering scandal "the biggest scandal in Europe", and no wonder.

Over a nine-year period, 200 billion euros were illegally transferred through the Estonian branch of Danske Bank, with customers traced to Russia, Azerbaijan and Ukraine.

The Eesti Ekspress article recommended below describes how, 11 years ago, Estonia's Financial Supervision Authority discovered irregularities in the bank's accounts. Back then, the head of the Estonian branch, Aivar Rehe, publicly committed to the fight against money-laundering. Clearly, he was merely paying lip service to the cause.

But there is a silver lining to the story too. Europeans are finally speaking up about money-laundering, an enormous problem on the continent. The European Parliament is even discussing implementing a new law: those involved in money-laundering would be sentenced to prison for a minimum of four years.

Details from the story:

  • Danske Bank's Estonian branch was inspected multiple times by Estonian and Danish institutions. 
  • Inspectors discovered that the bank had no identity records for the foreign companies they serviced. They didn't check where the money came from, or whether they were under international sanction and on terrorism lists.
  • During the presentation of the independent investigation that was published last week, the chief executive, Thomas Borgen, resigned.
  • As a result of the scandal, Danske Bank's Estonian branch was closed.
  • Danske Bank has a long history of money-laundering. Years ago, when Danske Bank operated under the name Forekspank, they already served many so-called non-residents -- mainly Russian customers. Forekspank was also the market leader in handling post-Soviet currency. As early as in 1997, Forekspank had opened an office in Moscow. 
  • The bank decided to give 200 million euros of the dubious funds  to charity.
  • The bank is facing penalties of up to 800 million euros.
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