Danske Bank money laundering scandal

The Danske Bank money laundering scandal arose in 2017–2018, when it became known that around €200 billion of suspicious transactions had flowed from Estonian, Russian, Latvian and other sources through the Denmark-based Danske Bank's only branch in Estonia from 2007 to 2015.[1][2][3] It has been described as possibly the largest ever money laundering scandal in Europe,[4] and possibly the largest in world history.[5] It includes incoming funds from Estonia (23%), Russia (23%), Latvia (12%), Cyprus (9%), the UK (4%) and others (30%, more than 150 countries each of which account for a smaller part than the UK). Outgoing funds were distributed between Estonia (15%), Latvia (14%), China (7%), Switzerland (6%), Turkey (6%) and others (52%)

Financial supervision

Danske Bank, headquartered in Copenhagen, is the largest bank in Denmark. The bank's local branch in Estonia, which was acquired by Danske Bank as part of a merger with Finnish Sampo Bank in 2007, was used for the activities.[3][6] It was under the jurisdiction of both the Financial Supervisory Authority of Denmark (due to the location of the headquarters) and the Financial Supervisory Authority of Estonia (due to the location of the branch), and both have blamed the other side for deficiencies.[7][8] The Danish and the Estonian supervisory authorities later released a joint press release on collaborating and sharing information on the case.[9] Both were allegedly criticized in a draft prepared by the

Events

In 2012, the Estonian Financial Supervision Authority published a critical report on the Danske Bank's activities. One of Russian whistleblower Sergei Magnitsky's stolen Hermitage Capital Management subsidiaries, Diron Trade LLP which had a Great Britain postal box, assisted in $5.8 billion in money laundering transfers between Swedbank's Baltic subsidiaries and Danske Bank during 6 months in 2010 and 2011 according to SVT.[11] During that time, Aivars Bergers, a board member of Latvia's leading pro-Russian party Harmony and one of its largest financiers, received EUR 270,000 from Diron Trade LLP and Murova Systems LLP, a company which has a Great Britain postal box and is associated with the Azerbaijani Laundromat in which $2.9 billion was money laundered through Danske Bank's Estonia branch.[11][12][13] In 2013, the first whistleblower disclosed that Danske's branch in Tallinn was knowingly dealing with funds from the family of Russian President

Results

Ten former employees in the local branch of the bank were arrested by Estonian authorities in December 2018,[22] and the bank was required by the Estonian government to close its Estonian branch in 2019.[23]

The CEO Thomas Borgen resigned in 2018 following the scandal. Danish authorities charged him in May 2019 with neglecting his responsibilities.[24] At the same time, Danish prosecutors charged Henrik Ramlau-Hansen, the bank's former finance director, with failing to prevent the suspicious transactions.[25] The Danish Parliament increased penalties for money laundering eight-fold, making them some of the toughest in Europe.[8][26]

See also

• 2014 Moldovan bank fraud scandal
• Azerbaijani Laundromat
• FinCEN Files
• Russian Laundromat