EU calls for probe into Danske Bank money laundering scandal

The European Commission has called for an EU investigation into the regulatory failures that led to a multi-billion euro money laundering scandal at Denmark's Danske Bank.

EU calls for probe into Danske Bank money laundering scandal
A file photo showing reparation work at Danske Bank in Stockholm. Photo: Leif BLOM / TT News Agency / AFP/Ritzau Scanpix

Denmark's largest lender is at the centre of a storm of controversy and several inquiries after it said “a large part” of transactions totalling 200 billion euros at its Estonian branch were “suspicious”.

The European Commission has written a letter to the European Banking Authority (EBA), the regulatory authority of the EU, to ask it to “fully utilise” its powers to probe what happened to the monitoring of Danske's Estonian office, spokesman Christian Wigand told AFP on Sunday.

More than 1.5 trillion Danish kroner (200 billion euros) transited through the Estonian subsidiary of Danske Bank between 2007 and 2015, according to an outside law firm that carried out a probe for Danske Bank.

The scandal engulfing Danske cost the lender's chief executive his job last week as investigators struggled to determine just how much dirty money transited through its Estonian subsidiary.

A big chunk of the allegedly-laundered funds came from Russia, according to the independent inquiry.

Danske itself said it could not be certain of the size of illegal sums involved.

The Financial Times reported that the letter from the European Commission to the EBA, which it has seen, called for investigators to establish any possible “breach or non-application of Union law both by the Estonian as well as the Danish supervisors”, and asked for a probe “with the necessary degree of urgency”.

Of the accounts under investigation — which Danske closed in 2015 — 6,200 are considered suspicious and most of them have been brought to the attention of authorities.

The scandal has triggered multiple inquiries, including in Denmark itself as well as by Britain's National Crime Agency.

READ MORE on the Danske Bank 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