Denmark to make money laundering fines eight times larger

A parliamentary majority supports making fines on financial institutions found guilty of money laundering eight times larger.

Denmark to make money laundering fines eight times larger
Parliamentary committee members presented the anti-money laundering measures on Wednesday. Photo: Nils Meilvang/Scanpix 2018

The measure means Denmark will likely have the strictest punishments in Europe for the offence, businesses minister Rasmus Jarlov said.

The agreement came after the release on Wednesday by Danske Bank, the country’s largest lender, of details of an internal investigation into money laundering at its Estonian branch.

“We have been working on this agreement for a while, but have been waiting for the outcome of Danske Bank’s investigation today, but of course there has been a lot of background work on this,” Jarlov said Wednesday.

A bank that earns 1.5 billion kroner from money laundering would face fines of between 24 and 30 billion kroner, a significant increase on a fine of around three billion kroner, which would be given under existing rules.

But the updated regulations will not be applied to Danske Bank in the ongoing case.

READ ALSO: What you need to know about Danske Bank's mushrooming money laundering scandal

“It is clear that when we make new laws, they apply to future cases,” Jarlov said.

“Money laundering laws have not been strict enough until now. That’s why we’re tightening them today. We have a mutual responsibility for this in parliament,” the minister added.

Parliament’s financial settlement committee, in which all parties excepting the Alternative and Red-Green Alliance are represented, agreed to support the new regulation.

“For the Socialist People’s Party, it is very important that we have some of the toughest and strictest rules in Europe and that we ensure much better whistleblowing than there is today,” Socialist People’s Party businesses spokesperson Lisbeth Bech Poulsen said.

Morten Bødskov, of the Social Democrat party, who chairs parliament’s business and export committee, said his party considered it important that fines were “not just made steeper, but significantly steeper”.

READ ALSO: Denmark to ban 500 euro notes after money laundering scandal


Danish police drop money laundering case against Danske Bank directors

Denmark’s economic crime unit SØIK has dropped potential charges for money laundering against three leading former directors of Danske Bank, Denmark’s largest bank, but investigation of the bank itself continues.

Danish police drop money laundering case against Danske Bank directors
File photo: Jacob Gronholt-Pedersen/Reuters/Ritzau Scanpix

The three directors, Thomas Borgen, Henrik Ramlau-Hansen and Lars Stensgaard Mørch were investigated in relation to a scandal involving large-scale money laundering at the Estonian division of the bank.

Each of the three confirmed to newspaper Børsen that charges have been dropped.

In a written statement to media, SØIK said it had not uncovered “evidence that any individual has shown negligence to such an extent that it can be characterised as gross” and that the law had therefore not been broken.

“For an individual to be convicted under money laundering laws, they must have committed gross negligence. In this case we have conducted a vert comprehensive and thorough investigation with a number of investigative steps,” acting head of SØIK Per Flig also said in the statement.

The bank itself is still under investigation for possible breach of money laundering laws, however, Flig noted.

READ ALSO: US files lawsuit against scandal-hit Danske Bank

No individuals now remain under suspicion in the investigation, meaning SØIK has dropped cases against all leading bank executive who were suspected by police in March 2019.

Around 1,500 billion kroner from foreign customers flowed through the Estonian division of Danske Bank between 2007 and 2015, an investigation found.

A large proportion of that money is considered to be suspicious. The scandal resulted in Borgen’s resignation as CEO and the bank closed its Estonian branch in 2019.

READ ALSO: More on the Danske Bank money laundering scandal