Estonia's financial regulator will investigate Danske Bank over allegations made by the Danish and UK media that the bank’s branch in Estonia was involved in money laundering, the regulator said on February 27.
The Financial Supervision Authority said it had inspected Danske Bank's business in Estonia in 2014 for possible money laundering and ordered changes in the way the bank handled non-resident clients.
However, investigation results published earlier this week by Danish newspaper Berlingske and the UK’s The Guardian suggested that the bank did not cooperate with the FSA at the time and withheld information on a non-resident company, Lantana Trade. The company was making suspicious operations and appeared linked to Russia’s top officials.
“The possible misleading of financial supervisors during the monitoring procedure is a serious breach, if Danske Bank had additional information about this client that was not submitted at the on-site inspection,” the FSA said.
During the previous inspection of Danske Bank’s dealings with non-resident clients, the FSA said it “identified large-scale, long-term and systematic violations of anti-money laundering standards”.
“We have launched a thorough investigation to get to the bottom of the events at that time in our Estonian branch,” Danske Bank’s head of compliance Anders Meinert Jorgensen told Reuters.
The investigation against Danske Bank is taking place as Estonia’s neighbour Latvia is also mired in a banking scandal. Latvia’s third largest bank ABLV is closing down after money laundering allegations made by US authorities.
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