Sunday 13 October 2019

Danske quits Baltics and Russia as fallout from money-laundering grows

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Frances Schwartzkopff and Ott Ummelas

Danske Bank will close its operations across the Baltic states and in Russia after authorities in Estonia kicked out the Danish lender amid a deepening money-laundering scandal.

The Financial Supervisory Authority in Tallinn yesterday took the extraordinary step of ordering Danske to close its operations in the Baltic country.

The agency is giving Denmark's biggest bank eight months to return deposits to customers and either sell or transfer loans to another lender.

The news surfaced not long after it emerged that the financial supervisory authorities in Estonia and Denmark were being investigated by the European Banking Authority as it tries to find out whether they did enough to prevent one of the bloc's worst ever money-laundering cases.

In a statement yesterday, Danske said it will close down its activities not only in Estonia, but also in Latvia, Lithuania and Russia.

Danske admitted in September that much of about $230bn (€203bn) that was processed at its Tallinn-based unit was probably tainted. The bank is now under criminal investigation in several jurisdictions, including in the US, and is facing fines potentially in the billions of dollars. The suspicious funds that flowed through Estonia are alleged to have originated in the former Soviet Union.

"We acknowledge that the serious case of possible money laundering in Estonia has had a negative impact on Estonian society, and we acknowledge that the Estonian FSA, against this background, finds it best that Danske Bank discontinues its Estonian banking activities," Jesper Nielsen, the interim chief executive officer of Danske, said in a statement.


Irish Independent

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