The European Banking Authority (EBA) has opened an investigation into the laundering of Russian money through Danske Bank with respect to the supervisory bodies in Denmark and Estonia.
The EBA will examine whether the Danish and Estonian financial services authorities fulfilled their obligations according to EU legislation.
In June 2018, the Estonian prosecution office initiated a criminal investigation against the Estonian branch of Danske Bank, which is believed to have participated in the laundering of more than $8 billion of funds belonging to clients from Russia and CIS countries between 2007 and 2015. Danske Bank CEO Thomas Borgen resigned in connection with the scandal.
At the start of September 2018, the Financial Times reported with reference to an independent investigation that in 2013 a “staggering amount” of funds had passed through the Estonian branch of Danske Bank – as much as $30 billion. News came out later in the year that the Danish authorities were investigating $150 billion worth of deals made between 2007 and 2015.
The US is also carrying out its own probe into Danske Bank’s Estonian branch. In July 2018, American-born business owner Bill Browder filed a lawsuit against the bank, claiming that it was one of the primary channels for embezzling money from the Russian budget. Sergei Magnitsky, the Russian tax accountant who uncovered the embezzlement scheme, died suspiciously in a Moscow prison. Igor Putin, cousin to Russian President Vladimir Putin, is also suspected of being involved in the money laundering scheme.
On 19 February, Danske Bank announced that it is ceasing its operations in the Russian market, as well as in Latvia, Lithuania and Estonia. In Estonia, the bank is closed for financial inspections. In the other countries, the banks are being closed as part of the anti-money-laundering strategy.