Sunday

17th Feb 2019

Danish bank faces criminal charges in test of EU system

  • The bank referred 42 employees to the police (Photo: Ross G. Strachan)

Danish prosecutors have filed criminal charges against the country's biggest bank, but it remains to be seen if any individuals will face justice for the biggest money-laundering scandal in EU history.

Sleuths had enough material to charge Danske Bank with violation of the country's anti-money laundering act in a move which could cost the bank hundreds of millions of euros in fines, the Danish State Prosecutor for Serious Economic and International Crime (SOIK) said on Wednesday (28 November).

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

"There's a very large ... amount of material to investigate, but we have advanced far enough to file a case against the bank," SOIK head Morten Niels Jakobsen said.

Danske Bank has admitted to handling around €200bn of "suspicious" money, mostly from Russia, via its Estonian branch, between 2007 and 2015 despite multiple warnings from an internal whistleblower and from Estonian, US, and Russian authorities.

It has referred 42 employees to Danish police. Its CEO, Thomas Borgen, resigned over the affair and its chairman, Ole Andersen, has signalled he will also step down.

But the SOIK made clear in a statement that its charges concern the company only, while a "second track" of the investigation has yet to determine if there is enough evidence of "personal liability" to also take action "against individuals in Danske Bank's management".

Jesper Nielsen, the bank's acting CEO, said in a statement the bank had "expected" the SOIK move.

"It's in our interest that the case is examined from top to bottom," he added, pledging full "cooperation", as the lender tries to rebuild its reputation.

The SOIK highlighted that it was working with Estonian prosecutors via a "joint investigation team" created under the banner of Eurojust, an EU judicial agency in The Hague.

The Danske Bank affair, which also involved German lender Deutsche Bank and two US banks, JP Morgan and Bank of America, has prompted the European Commission to table new anti-money laundering laws in a test of the bloc's ability to regulate the banking sector.

It saw justice commissioner Vera Joureva, ask the European Banking Authority (EBA), an EU agency in London, to probe whether the national Danish financial watchdog did its job properly.

It also prompted the European Central Bank (ECB) in Frankfurt to create a new anti-money laundering (AML) taskforce inside the Single Supervisory Mechanism (SSM) - an ECB offshoot, also in Frankfurt, in which national regulators meet to exchange information.

"The AML Office will set up and chair 'an AML Network' among Joint Supervisory Teams in charge of the banks whose business model leads to a high level of money laundering risks," the ECB's chief supervisor, Daniele Nouy, told MEPs in a hearing on Danske Bank last week.

The ECB, earlier this year, withdrew the banking licence of Pilatus Bank in Malta and helped force ABVL, a Latvian lender, out of business over corruption allegations.

But these were small fry compared to Danske Bank, which has holdings worth 140 percent of the Danish GDP.

Deutsche Bank dragged into Danish bank scandal

Deutsche Bank, Germany's top lender, handled about €130bn of the "suspicious" money in the Danske Bank affair, new revelations show, as whistleblower testifies to MEPs.

Estonia joins US in passing Magnitsky law

Estonia has voted to ban entry to foreigners deemed guilty of human rights abuses in a law targeting Russia and inspired by the Magnitsky case.

Feature

Romania enlists priests to promote euro switchover plan

Romania is due to join the single currency in 2024 - despite currently only meeting one of the four criteria. Now the government in Bucharest is enlisting an unlikely ally to promote the euro to the public: the clergy.

News in Brief

  1. Spain's Sanchez calls snap election on 28 April
  2. 15,000 Belgian school kids march against climate change
  3. May suffers fresh Brexit defeat in parliament
  4. Warning for British banks over Brexit staff relocation
  5. Former Italian PM wants Merkel for top EU post
  6. Antisemitic incidents up 10% in Germany
  7. Italy's asylum rejection rate at record high
  8. Hungary will not claim EU funds for fraudulent project

Opinion

Eastern Europe Matters

The foreign ministers of Sweden, Poland and the Czech Republic reflect on 10 years of the Eastern Partnership with Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine.

Stakeholders' Highlights

  1. Counter BalanceEU bank urged to free itself from fossil fuels and take climate leadership
  2. Intercultural Dialogue PlatformRoundtable: Muslim Heresy and the Politics of Human Rights, Dr. Matthew J. Nelson
  3. Platform for Peace and JusticeTurkey suffering from the lack of the rule of law
  4. UNESDASoft Drinks Europe welcomes Tim Brett as its new president
  5. Nordic Council of MinistersNordic ministers take the lead in combatting climate change
  6. Counter BalanceEuropean Parliament takes incoherent steps on climate in future EU investments
  7. International Partnership For Human RightsKyrgyz authorities have to immediately release human rights defender Azimjon Askarov
  8. Nordic Council of MinistersSeminar on disability and user involvement
  9. Nordic Council of MinistersInternational appetite for Nordic food policies
  10. Nordic Council of MinistersNew Nordic Innovation House in Hong Kong
  11. Nordic Council of MinistersNordic Region has chance to become world leader when it comes to start-ups
  12. Nordic Council of MinistersTheresa May: “We will not be turning our backs on the Nordic region”

Latest News

  1. Sluggish procedure against Hungary back on table
  2. Could Finnish presidency fix labour-chain abuse?
  3. Brexit and trip to Egypt for Arab League This WEEK
  4. Belgian spy scandal puts EU and Nato at risk
  5. EU Parliament demands Saudi lobby transparency
  6. Saudi Arabia, but not Russia, on EU 'dirty money' list
  7. EU agrees draft copyright reform, riling tech giants
  8. Rutte warns EU to embrace 'Realpolitik' foreign policy

Join EUobserver

Support quality EU news

Join us