Danish lender Danske Bank began the process of closing down its operations in Estonia on October 1.
The shutting down is the effect of a February order from the Estonian financial market watchdog Finantsinspektsioon. The watchdog ordered Danske Bank to end activity in Estonia after the branch was revealed to have funnelled billions of euros in a massive breach of national and EU anti-money-laundering regulations.
The majority of the remaining clients of the bank will be handed over to LHV Bank and to the Lithuanian branch of Danske Bank, Finantsinspektsioon said in a statement.
Following numerous reports in the Danish and UK media, Danske Bank admitted in September last year that estimated €200bn worth of payments went through its Estonian branch between 2007 and 2015, many of them suspicious.
“We had a large number of non-resident customers in Estonia that we should have never had, and that they carried out large volumes of transactions that should have never happened,” the bank said at the time.
The former head of Danske's Estonian branch, Aivar Rehe, was found dead on September 25, two days after being reported missing from his home in the Tallinn suburb of Pirita. Police have confirmed that he committed suicide.
Danske Bank also plans to close its branches in Lithuania, Latvia, and Russia, as it aims to focus on Nordic markets.
Another Nordic lender, Swedbank, said on September 30 it has let go three executives from its Estonian branch in the aftermath of a money-laundering scandal that has put it under international investigation.
Swedbank is being probed by authorities in the US, Sweden, and the Baltic states over a series of allegations that surfaced in the Swedish media early this year. They centre on Swedbank handling billions of euros’ worth of suspicious transactions, including from non-resident clients based in Russia. The shady transactions flowed between 2010 and 2015, it is alleged.
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