The Finantsinspektsioon (Estonian Financial Supervision Authority or EFSA) has ordered Danske Bank A/S to cease operations in Estonia following charges by Danish authorities that the bank facilitated money laundering through non-resident accounts at its Tallinn branch. Under the precept, Danske has eight months to reorganize its relationships with 14,700 depositors and 12,300 borrowers in Estonia. The bank will face a €100,000 per day penalty for each breach after that time, up to the legal maximum of 10% of the total net turnover of Danske Bank. Danske Bank has announced that it plans to close all of its activities in Estonia, Latvia, Lithuania, and Russia, except for a shared services center in Lithuania. The bank has recently disclosed money laundering investigations by US, French and Danish authorities.
In a separate announcement, the European Banking Authority announced that it has opened a formal investigation into whether Estonian and Danish financial regulatory authorities failed to comply with their obligations under European Union law to prevent money laundering. The EBA announcement was preceded by a letter to the European Commission announcing the decision to open a formal Breach of Union Law Investigation against the Estonian Finantsinspektsioon and the Danish Finanstilsynet, pursuant to Article 17 of the EBA’s founding Regulation, EU No 1093/2010.
Finantsinspektsioon news release | EBA press release
Danske Bank news release