On April 28, 2022, Danske Bank Group announced that it is in initial discussions with US and Danish authorities regarding a possible resolution of the Estonia matter described below; however, the bank does not know the timing, form of resolution or amounts involved in a potential settlement. While the bank will not comment on its discussion with authorities, the penalty is likely to be material. As a result, Danske’s Board of Directors has decided not to pay out dividends in connection with the announcement of the interim report for the first quarter of 2022.
In 2018, Danske Bank disclosed the results of an internal investigation of its Estonia branch, which uncovered anti-money laundering (AML) deficiencies in the bank’s compliance program that allowed the branch to process suspicious transactions between 2007 and 2016 (including a large volume of transactions conducted in Estonia for non-resident customers) and revealed failures to report red flag transactions to superiors within the branch. In 2015 and early 2016, the bank reportedly closed all non-resident accounts in the Estonia branch. While the bank donated millions to combat international financial crime and established a comprehensive anti-money laundering program after discovering these deficiencies, many international enforcement authorities launched investigations into the bank’s practices including the US Department of Justice, the Securities and Exchange Commission and the Department of the Treasury’s Office of Foreign Assets Control (OFAC), as well as authorities in Estonia, Denmark, and France.
In 2019, the Estonia Financial Supervision Authority (EFSA) ordered Danske Bank to cease its operations in Estonia following allegations by Danish authorities that the bank allowed money laundering in its Estonia branch, while Danske also announced plans to close down its activities in Latvia, Lithuania and Russia. In 2020, Danske Bank announced that OFAC had terminated its investigation into potential sanctions violations by Danske bank’s Estonia branch.