Niall Hearty outlines the ending of the last investigation into the Danish bank's money laundering scandal in Estonia.
Danske Bank is to pay a 6.3 million euro settlement to French authorities over its massive money laundering failings at its now-closed Estonia branch.
The settlement brings to an end the French investigation into Danske Bank's activities in Estonia. It was the last investigation to be completed into Danske's handling of non-resident accounts at the branch in Tallinn.
In 2018, Danske revealed that more than $230 billion had flowed from Russia and other former Soviet states through the branch. It said that many of the transactions were likely to be illegal, which led to intense scrutiny of the branch's activities. The scandal broke out after a former trader told Danske's Copenhagen head office about suspicious activities taking place in the Estonian division.
In 2019, Estonia told Danske Bank to close the branch before the end of that year. Two years ago, Danske agreed to pay $2 billion in a settlement with U.S. and Danish authorities over the problems at the branch. The bank admitted anti-money-laundering failings.
But France was not part of the US and Danish settlement. It opened its own investigation and found that Danske had a "passive and complacent attitude" toward its financial crime controls.
In 2023, Estonian authorities charged six former officials of Danske Bank's Estonian division for their alleged role in the money laundering scandal. The Estonian Prosecutor's Office said that the six were jointly responsible for establishing and operating the money laundering scheme, which was hidden from other units of the bank.
The six are accused of laundering billions of dollars' worth of dirty money that came from crimes committed in Russia, Azerbaijan, Georgia, Switzerland, the United States and Iran. They are alleged to have offered to create legal entities for criminals to disguise the true owners of assets and to have advised on how to hide electronic transaction trails. Their trial began last November and is scheduled to end this month.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.