29 Nov 2018
Denmark’s top lender has been formally hit with charges of violating numerous financial crime controls, including failings on source of funds, beneficial ownership and politically exposed persons (PEPs).
On Wednesday, the Danish State Prosecutor for Serious Economic and International Crime (SØIK) published its charges against Danske Bank, outlining its failure to train staff on key aspects of compliance, amid concerns that it facilitated money laundering and terrorism funding.
The charges come after SØIK launched an investigation in August this year. The following month, Danske published an internal report which revealed that up to €200 billion of suspicions funds flowed through its Estonian unit over an eight-year period.
SØIK’s allegations, which focus mainly on the Estonian branch and cover the period February 2007 to January 2016, show that the bank failed to provide adequate IT systems or human resources for workers to perform transaction monitoring and did not provide enough information about the source of funds, prosecutors said.
“For parts of the period in question, no person responsible for compliance was appointed at management level,” the charge sheet explains.
Danske also did not get enough information about the proof of identity of the beneficial owners – or true owners – in essence, ‘customer relations were established with intermediaries without the underlying persons or companies being identified.’
In addition, it did not satisfactorily assess profiles considered to be ‘risky’ – such as individuals holding influential positions or top public officials.
“The establishment and possible continuation of business relations relating to politically exposed persons were not approved by the branch’s person responsible for compliance at management level, such customers’ relations were not subject to increased monitoring,” SØIK alleged.
“In connection with the termination of such customer relations, no assessment was made of whether the customer in question posed an increased risk of money laundering and financing of terrorism.”
Responding to the charges, Danske acting CEO Jesper Nielsen said: “It is in our interest that the case is fully investigated, and we will, of course, cooperate with SØIK and make ourselves and the knowledge we have available in relation to the ongoing investigation.”
– Irene Madongo
Photo: Danske Bank, Lithuania.
Advance your CPD minutes for this content, by signing up and using the CPD WalletFREE CPD Wallet