Top Danish Bank Flees Baltic States in Fiscal Scandal
The Estonian Financial Supervisory Authority (EFSA) commanded on February 19 that Danske, Denmark’s top-lending bank, cease its operations in Estonia following the accusal and subsequent arrest of multiple high-ranking officers on accounts of large-scale, systematic money laundering. Danske has committed to leaving Estonian markets and those of Latvia, Lithuania, and Russia amid the European Parliament’s investigation into the extent of financial misconduct and Danish negligence.
Howard Wilkinson, a whistleblower and ex-employee of Danske’s Estonia branch, brought these accusations to light after leaving the bank in 2014. In the ensuing legal process, Wilkinson has sought protection from both Estonian and Danish authorities in exchange for testifying in front of the European Parliament.
In 2010, the EFSA arrested 10 implicated suspects of money laundering in Estonia, with more arrests highly likely. Around the same time, they published a report outlining the accountability of the Danish Financial Supervisory Authority’s in Danske’s fraudulent behavior, given its silence during the 2007-2014 anti-money laundering investigations in Estonia.
The Danish FSA issued a statement of response splitting the blame between the two countries’ faulty vigilance. The statement also outlines four main categories of proposals to strengthen the country’s financial oversight and prevent future acts of money laundering.
Amidst these investigations and Danske’s statements of future anti-money laundering initiatives, investigative broadcaster Uppdrag Granskning released documents implicating Swedish bank Swedbank as an accomplice in the matter. Over $4 billion was moved from Swedbank through the Baltic branches of Danske bank during the investigative period from 2007 to 2015 to an alleged 50 non-corporate accounts.
Though Swedbank’s actions are a drop in the pool of the $260 billion moving illicitly through Danske’s Estonian branch alone, it muddies the route to a clear-cut culprit. The destination of this money remains undiscovered. As is the usual case with Baltic financial scandals, Russian soft power is one common scapegoat.
“I think that we can assume that a certain amount of money laundered, of Russian origin, has been used for disinformation campaigns and influencing decision-making, including elections or the UK referendum [on EU membership], perhaps," admitted Petr Ježek, former Czech Prime Minister and member of the European Parliament Committee on Financial Crimes.
"It would almost be a miracle if no money from that had not been used for that purpose,” he added.
Regardless of the elusive recipient of the dirty money, Danske’s flight from the Baltic states will without a doubt hinder future corruption and bolster existing anti-corruption efforts.