Supervisors ignored Russian warnings over money laundering at Danske – document
01 May 2019

Russia’s Central Bank sent warnings in 2007 and 2013 to Estonian and Danish financial supervisors over suspect transactions worth billion of dollars at the Estonian branch of Danske Bank but they were largely ignored, a confidential EU document shows.

The EU paper, seen by Reuters, is the outcome of an investigation by the European Banking Authority (EBA) and details for the first time the extent of supervisory shortcomings in the two countries over the Danske case.

The EBA investigation followed the disclosure last year of a money-laundering scandal at Danske Bank, Denmark’s largest bank, which has admitted that 200 billion euros (£172 billion) of suspicious transactions flowed through its Estonian branch between 2007 and 2015.

The EBA document cites internal communications between the Russian Central Bank and the Estonian and Danish supervisors in which Moscow warned of money laundering risks and tax evasion linked to payments to clients of the Estonian branch of Danske Bank.

The EBA document showed that regulators did not take sufficient action to address risks after the Russian warnings, in what the EBA said was a breach of EU rules.

Earlier this month, the EU’s national banking supervisors, who control the EBA, rejected the watchdog’s proposal on the rule breach and effectively blocked further action against the Estonian and Danish regulators.

By Francesco Guarascio, Reuters, 30 April 2019

Read more at Reuters

Photo: Finn Årup Nielsen [CC BY-SA 3.0], via Wikimedia Commons

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