Denmark’s largest bank, Danske Bank is currently facing some troubles in relation to allegations that the bank allowed some Russian citizens to continue to operate their accounts despite the fact that their names were already on a black-list from the Russian authorities.
The bank is currently under investigation by authorities in the US, Denmark and Estonia. The Wall Street Journal reported on Tuesday that its officials “knew earlier than previously indicated about problems as its tiny Estonia branch, including that it held accounts for blacklisted Russian clients.”
“Officials at Danske Bank were aware almost two years before it started shutting questionable accounts that the small but highly profitable branch was involved in potentially illicit money flows,” the publication elaborated.
The publication noted that the Estonian branch was one of the bank’s profit drivers. It generated a net profit of €63 million (~US$73.5 million) in 2012. The same year, the whole bank reported €636.6 million (~$742.6 million) in net profit. It was their most lucrative year.
Danske bank has been at the center of one of Europe’s greatest money laundering cases. About $150 billion was suspected to have passed through the branch in Denmark to non-Estonian account holders, most of who were said to be Russian clients.
This is said to have happened between 2007 and 2015. The bank has not confirmed the exact amounts involved relating to the suspicious transactions. An internal investigation was launched and results were to be released on Sept. 19.
The Wall Street Journal made mention of an April 2013 email, revealing that the bank’s anti-money laundering (AML) chief who is based in Denmark, had asked colleagues in the Estonian branch “about client accounts whose owners appeared on a blacklist generated by Russia’s central bank. A database of about 500,000 names of individuals and companies suspected of financial wrongdoing is being kept by the Bank of Russia, which it shares across borders.
On Tuesday, the Estonian Financial Supervision Authority (FSA) said as reported by the news outlet, that “it repeatedly complained to Danish counterparts about the branch’s blacklisted customers.” It added that in a 2013 email, Niles Thos Michelson, the bank’s compliance executive at that time, wrote: “they have the impression that we do not take the issue seriously.”
The news outlet made mention of a spokesman for the Danish FSA who released a statement reprimanding Danske Bank in May said at the time that the authority had received “misleading” information from the bank between 2012 and 2014. According to Danske, the information came from the branch.