Danske Bank $234 billion money laundering is ‘biggest scandal in Europe’
21 Sep 2018

A top EU official overseeing money laundering issues in the bloc has described the multi-billion euro money laundering scandal at Danske Bank as the ‘biggest’ on the continent.

Věra Jourova’s Justice and Consumers unit at the European Commission has seen through a number of major laws to tackle money laundering and terrorism financing in the bloc, including the EU Fourth and Fifth Anti-Money Laundering Directives, EU 4AMLD and EU 5AMLD respectively.

The rules seek to prevent dirty money flowing through Europe’s banks, such as by establishing central bank registers, improving corporate transparency and due diligence checks on bank customers.

“I want to understand better where the main errors happened, whether it was purely a fault of the due diligence done by the bank itself or whether there was some mistake of the supervisory authority,” Jourova said to journalists.

“This is the biggest scandal, which we have now in Europe, which is also a very unpleasant lesson [showing] the need to be much more vigilant and [for] much more prudent checking [of banks’ activities].”

The Danske troubles come on the heels of a string of widely publicised scandals that have rocked the European financial sector and exposed deep compliance flaws in Eastern and Western European banks.

Days before Danske’s damning report was published, Swiss banking watchdog Finma announced that it has concluded its investigation into the involvement of Swiss banks in major corruption scandals.

It found Credit Suisse had breached anti-money laundering rules and fell short of performing important compliance checks regarding the FIFA corruption scandal.

A couple of weeks prior to that, Dutch bank ING announced it had reached a deal with national prosecutors to pay a 775 million euro fine over its poor anti-money laundering controls which in some cases allowed customers to launder cash for years.

The freshly announced findings at the Western European banks follow troubles in Eastern Europe earlier this year, such as in Latvia, where ABLV bank shut down after a series of events which kicked off when the US accused it of facilitating money laundering.

Danske’s publication of its report could be, not the end, but beginning of fresh pain and pressure for the lender, with a number of regulators and public officials reported to be keen to get more answers from the bank.

Irene Madongo

Read more:

Danske Bank CEO resigns over $234 billion money laundering scandal

Money laundering at Danske Bank: Lessons for financial crime professionals (Part 1)

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