Efforts to crack down on money laundering across the Nordic and Baltic states have taken a more aggressive turn.
Estonia's state prosecutor is expanding an investigation into Danske Bank to include Swedbank of Sweden. Meanwhile, the accounting firms Ernst & Young and KPMG were both reported to the police in Denmark amid allegations they failed to respond to red flags tied to possible money laundering. The development comes as officials struggle to reset their public image against a backdrop of spiralling dirty-money scandals.
A picture has formed in which criminals from the Soviet Union often sought out the Baltic units of Nordic banks to channel funds into the West.
Since it was revealed last year, Danske's €203bn Estonian laundering saga has exploded to engulf multiple other firms. Swedbank, which from its base in Stockholm dominates the financial markets of the Baltics, is the latest to find itself the target of probes which investors fear will lead to hefty fines. Estonia's state prosecutor may decide to open a separate investigation into Swedbank, depending on what it finds through the current probe, according to spokeswoman Olja Kivistik.
The prosecutor based its decision on information in a criminal complaint from Hermitage Capital Management co-founder Bill Browder. The financier, who's made a career of chasing money launderers, says that roughly $1trn in questionable Russian funds is either already inside the EU, or trying to get in, much of it via the Baltic region. The probes "probably should be tied together because some of the money flowed from Danske Bank to Swedbank," Browder said. "Many of the banks in Estonia were sending money to one another, and so it's quite logical to combine these cases." Swedbank had tried to play down allegations but was forced to backtrack after Sweden's main broadcaster, SVT, published a series of allegations.
Sunday Indo Business