Estonia says over $1 trillion flowed through the country in 2008-2017
04 Oct 2018

Banks doing business in Estonia, which has been at the centre of a money-laundering scandal involving Danske Bank, handled more than $1 trillion (768.18 billion pounds) in cross-border flows between 2008 and 2017, according to the country’s central bank.

The European Union member country of just 1.3 million people has been rocked by revelations that banks there laundered money from Russia, Moldova and Azerbaijan via non-resident bank accounts. The scandal has forced lenders in Estonia and neighbouring Latvia to shut down.

The scale of the cross-border flows, first report by Bloomberg, suggests that money laundering through the small Baltic country may have been larger then previously thought.

The news sent Nordic banking shares sharply lower.

The central bank said that between 2008 and 2017, cross-border transactions totalled 1.1 trillion euros ($1.27 trillion). The number includes all flows, including resident and non-resident transactions, a spokesman said.

Estonia’s entire GDP is only about $23 billion.

The central bank did not say whether it considered any of the flows suspicious.

Bloomberg on Wednesday reported figures from the central bank saying that Estonia handled about 900 billion euros in non-resident cross-border transactions between 2008 and 2015.

A central bank spokesman told Reuters the bank does not have specific data for non-resident transactions.

“This is a surprising figure,” said Danish expert on money laundering Jakob Dedenroth Bernhoft. “This indicates that the Danske case is not a one-off affair and that the problem related to other banks as well.”

Sweden’s SEB and Swedbank, which both have banking operations in Estonia, were trading 5.4 percent and 7.2 percent lower, respectively.

A trader says this is “clearly not good news in the light of Danske Bank, and the numbers they are talking about look to be bigger.”

– By Jacob Gronholt-Pedersen, Teis Jensen, Tarmo Virki in Tallinn, REUTERS, 3 October 2018.

Link to Reuters.

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