Security & Fraud

Danske Officials Knew About Estonian Branch Woes Earlier Than Indicated

Danske-Bank

Danske Bank officials were aware of problems at its Estonian branch earlier than they indicated, reported The Wall Street Journal.

According to the report, citing a correspondence seen by the paper, the bank officials knew that the branch in Estonia had accounts for Russian clients who had been blacklisted. This is the latest indication that Danske Bank officials knew nearly two years before the questionable accounts were shut down that its small but very profitable branch could be involved in an illegal scandal.

In April 2013, The WSJ reported that the anti-money laundering chief of Danske Bank asked employees in the Estonia branch about the client accounts that had been on a blacklist provided by Russia’s central bank. The email stated that Estonian authorities have repeatedly complained to the banking regulators in Denmark.

“They have the impression that we do not take the issue very seriously,” wrote Niels Thor Mikkelsen, the bank’s then-compliance executive. He went on to say in the email that the Danish Financial Supervisory Authority was “very worried because they have confirmed to U.S. authorities that we comply with Danish [anti-money laundering] requirements.”

The email was copied to several employees of the branch, noted the report. The executive said it wasn’t clear if the Estonian bank was in compliance and inquired about how the bank handles relationships with blacklisted customers. According to the email, The Wall Street Journal implies that officials were aware of the problems during the first half of 2013. In July, Danske Bank said it learned of the problems at the Estonia branch in December of 2013.

In July, Danske took a hit as investors started to pay attention to the scandal, which centers on its Estonia branch, where billions of dollars’ worth of suspicious transactions took place. The transactions reportedly happened between 2007 and 2015 and involved money from Russia, Azerbaijan and Moldova, all former Soviet Union states.

“It is very serious. If you look at this scandal, you can compare it to the most serious money laundering scandals in Europe. It’s a disaster for the bank,” said Jakob Dedenroth Bernhoft, a Danish expert on money laundering.

——————————–

Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out our April 2019 Unattended Retail Report. 

TRENDING RIGHT NOW

To Top