Danske Bank executive leaves amid criticism over Estonian money laundering controls
05 Apr 2018

A senior Danske Bank (DANSKE.CO) executive quit on Thursday after the lender found there should have been an earlier and more thorough investigation into alleged money laundering at its Estonian branch.

The departure of Lars Morch, responsible for the Baltic operations of Denmark’s biggest bank since 2012, comes during an internal investigation into the Estonian operations due to be completed by September.

The case is one of several highlighting alleged money laundering issues in the Baltic states as authorities clamp down on conduits for illicit funds linked to Russia.

Danske Bank Chairman Ole Andersen said he respected Morch’s decision to resign and said it was clear the bank should have undertaken more thorough investigations at an earlier point.

“Such investigations would have led us to understand the full extent of the issues sooner and prompted swifter actions,” Andersen said. “We have discussed this situation with Lars Morch over the last few weeks”.

Danske said Morch would be released from his duties as soon as possible and he would formally end his employment at the end of October 2019. He will continue to be paid in the meantime.

The bank had been criticized for failing to take appropriate measures after a whistleblower who, according to reports in Denmark’s Berlingske and Britain’s Guardian, alerted the bank in December 2013 about money laundering linked to Russia through its Estonian branch.

Morch, who also received warnings from the bank’s internal auditors in early 2014 about insufficient compliance at the Estonian branch, according to documents reviewed by Danish newspaper Berlingske, could not be reached for comment.

– By Teis Jensen; Additional reporting by David Mardiste, Reuters, 5 April 2018

Link here to Reuters article.

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