12 Nov 2019
At the height of the Danske Bank A/S dirty-money scandal, the lender started offering gold bars to wealthy clients to help them keep their fortunes hidden, according to documents seen by Bloomberg.
The bank’s Estonian branch, which was already wiring billions of client dollars to offshore accounts, told a select group of customers, mostly from Russia, that they could now also convert their money into gold bars and coins, according to the documents, which date back to the middle of 2012.
Aside from offering a hedge against risk, Danske pitched gold as a way for clients to achieve “anonymity,” according to the documents. It also said that using gold ensured “portability” of assets, according to an internal presentation dated June 2012.
A spokesman for Danske Bank declined to comment. In Danske’s September 2018 tell-all report on its non-resident unit, the bank listed the services it provided to clients. Aside from payments, these included setting up foreign-exchange lines, as well as bond and securities trading. The bank didn’t list the sale of gold bars.
Danske Bank, which is being investigated across Europe and in the U.S. after failing to screen about $220 billion that gushed through its non-resident unit in Estonia from 2007 to 2015, has now shuttered the operations at the heart of the scandal. That’s after local authorities kicked Danske out, as the scope of the affair became clear.
It’s not known how much gold Danske managed to sell while the now defunct Estonian unit was still running. But according to an internal email seen by Bloomberg, at least some clients used the service. Local private banking clients were also offered the service.
For gold bars weighing 250 grams or more, clients at Danske’s non-resident unit could obtain the precious metal without a sealed pack or paper certificates. Anti-money laundering approval was needed before customers could collect the gold, but such approvals weren’t necessary if the gold was kept in long-term storage, according to the documents.
By Irina Reznik, Ott Ummelas and Frances Schwartzkopff, Bloomberg, 10 November 2019
Read more at Bloomberg
RiskScreen: Eliminating Financial Crime with Smart Technology
Advance your CPD minutes for this content, by signing up and using the CPD WalletFREE CPD Wallet