Estonia to investigate Danske Bank after new money laundering allegations
27 Feb 2018

Estonia’s financial regulator said on Tuesday it would open an investigation into Danske Bank after media reported it had been aware of money-laundering allegations at its Estonian branch as far back as 2013.

Estonia’s Financial Supervisory Authority (FSA) said it would look at whether Danske, Denmark’s biggest bank, knowingly withheld information from the regulator during a series of inspections it conducted at its Estonian branch in 2014.

“We will immediately start a new investigation and we will be asking for the information that was not provided to us earlier,” Livia Vosman, head of communications at the FSA, told Reuters.

In an emailed statement, Danske’s head of compliance, Anders Meinert Jørgensen, said the bank had held constructive talks with Estonian authorities.

“We have launched a thorough investigation to get to the bottom of the events at that time in our Estonian branch. We cannot comment on the matter further, until the investigation has finalised,” he said.

The Estonian investigation follows a report in the Danish newspaper Berlingske and Britain’s Guardian on Tuesday,
as well as other international media outlets, that said a whistleblower had alerted the bank in December 2013 about money laundering linked to Russia through its Estonian branch.

The reports allege that those activities involved UK-registered companies that had accounts with Danske in Estonia.

They said the whistleblower told Danske’s management that one of the companies, Lantana Trade LLP, was making suspicious payments and appeared to be linked to Russian personalities.

Lantana was dissolved in 2015. Danske Chief Executive Thomas Borgen said in an emailed statement that he could not comment on specific customers, “but the entire portfolio in question (non-residents) has been closed down.”

Kremlin spokesman Dmitry Peskov did not immediately respond to a request for comment.

The FSA said its 2014 inspections at Danske’s Estonian branch had uncovered “large-scale, long-term and systematic violations of anti-money laundering standards.”

It said, however, that the bank at the time had not revealed the existence of an internal review in which questions were raised about who were the beneficial owners behind Lantana.

Link to the Reuters article here.

By David Mardiste and Jacob Gronholt-Pedersen, Reuters, 27 February 2018

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