According to the Wall Street Journal, U.S. law enforcement agencies have launched investigations of Denmark’s largest bank, Danske Bank because of suspected money laundering. Danske Bank has inspected by Denmark and Estonia and the CEO of the bank continuously neglected warnings due to suspicious transactions. Now, the U.S. Justice Department, Treasury Department and Securities and Exchange Commission (SEC) have investigated Danske Bank after a secret whistleblower accused cases for more than two years.
During 2007 to 2015, it is doubted that approximately $150 billion transaction have flowed to Danske Bank’s Estonian branch from Russia, Azerbaijan and Moldova. Danish and Estonian authorities investigated the bank and share information with their U.S. partners and some European officials. The bank has also conducted an internal investigation and will release the results on September 19.
The U.S. has not ‘officially’ approved the investigation for Danske Bank yet. Marshall Billingslea from the U.S. Department of the Treasury’s Assistant Secretary for Terrorist Financing mentioned that when the bank does not have a proper license in the U.S., it has a bond program in dollars and its Estonian branch detected U.S. dollar customer flow which grabbed the U.S. regulators’ curiosity.
The U.S. Treasury can limit the supply of U.S. dollars to foreign banks while the Treasury and Justice Department can fine banks. In fact, in July, Danske Bank was obligated to be fined due to the use of dollar funding and transactions.
It has become a serious issue because the CEO of Danske Bank, Thomas Borgen, did not put much attention to previous warnings. He ignored calls to scale back business at the Estonian branch.
Borgen emphasized the necessity for a middle ground and wanted to consider it more after the forum which was taken in 2013 October. The Wall Street Journal specified it by stating “Estonian officials are probing 26 former Danske employees regardless of their positions. They are suspected to give help to launder $230 million which are related to a fraud in Russia.”
Furthermore, the whistleblower complains became a source that Deutsche Bank AG and Citigroup Inc,, are involved in Danske Bank’s money laundering. Deutsche Bank has played a role as a correspondent bank for Danske, managing dollar wire transfer. Citigroup’s Moscow office was involved in some transactions with Danske Bank’s Estonian branch. Due to problematic situations, the bank’s share price has faced a downfall this year.
Author: Jieun Lee