February 19, 2019

Danish bank withdraws from Russia and the Baltics following money laundering investigation

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

EBA letter |

Danske Bank news release