Danish bank announces possible resolution of anti-money laundering investigations in the US and Denmark

On October 27, 2022, Danske Bank announced that it was nearing a resolution of anti-money laundering investigations by US and Danish authorities related to its business in Estonia.  The bank anticipated a total settlement amount of approximately DKK 15.5 billion (over $2 billion), and thus set aside DKK 14 billion for the third quarter of 2022, in addition to the DKK 1.5 billion the firm had announced in 2018. 

In 2018, Danske Bank disclosed details of an internal investigation of its Estonia branch that had uncovered AML deficiencies in the bank’s compliance program.  These deficiencies resulted in the processing of a large volume of suspicious transactions involving non-resident customers between 2007 and 2016, and in failure to report red flag transaction to superiors within the branch.  In 2015 and 2016, the bank reportedly closed all nonresident accounts in the Estonia branch.  In 2018 and 2019 several national enforcement authorities launched investigations into the bank’s practices, including the US Department of Justice, the Securities and Exchange Commission and the US Department of the Treasury’s Office of Foreign Assets Control (OFAC), as well as authorities in Estonia, Denmark, and France.  Estonian authorities ultimately ordered Danske to cease operations in Estonia in 2019.  The bank also announced plans to close down its branches in Latvia, Lithuania, and Russia.  In 2020, OFAC announced that it had terminated its investigation into possible sanctions violations by the Estonia branch, and more recently, in April 2022, Danske announced that it would not be paying dividends in the first quarter of 2022 in anticipation of reaching possible resolutions with US and Danish authorities that would likely involve a substantial penalty.

Danske Bank Press Release

 
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