EU anti-fraud group heads for Estonia, Denmark to learn Danske Bank lessons

February 5, 2019

By Teis Jensen

COPENHAGEN (Reuters) – In the wake of Danske Bank’s money laundering scandal, an EU committee will visit Estonia and Denmark this week to meet regulators, prosecutors and the bank’s new management to discuss ways to crack down harder on fraud.

Between 2007 and 2015, 200 billion euros ($228 billion) of suspicious payments from Russia and other states flowed through the Estonian branch of Danske Bank, which is being investigated in Denmark, Estonia, Britain and the United States.

Europe has been hit by a string of money laundering scandals recently, including the collapse of Latvia’s ABLV Bank, the closure of Malta’s Pilatus Bank and a 775 million euro fine imposed on Dutch lender ING.

EU governments reached a preliminary deal in December to clamp down on money laundering by strengthening bank supervision through the European Banking Authority (EBA).

Now the European Parliament’s Special Committee on Tax Crimes, Tax Evasion and Tax Avoidance is looking for inspiration to tighten laws further on a trip to Denmark and Estonia from Wednesday to Friday.

Jeppe Kofod, a spokesman for the committee, said what was needed was a European platform where the countries’ financial intelligence units could exchange information swiftly to tip off each other and help solve crimes.

“I would like a financial “FBI” where national police authorities can cooperate and move in, in case of money laundering or other serious fraud,” Kofod said.

Danish and Estonian financial regulators have been blaming each other for the scandal, which has highlighted the need for better cross-border surveillance.

“There have been plenty of warnings in the case, but not enough action and on-site follow-ups,” Kofod said. “So there is obviously clear failures from Dankest Bank, but also a regulatory work that has proved not to be working properly”.

Besides the authorities’ investigations more than a dozen law firms have said they are trying to gather shareholders to sue Denmark’s largest bank over a scandal that has already cost it its CEO and chairman.

Brussels-based consultancy firm Demon has sent a letter to bank’s board saying it would “seek the appointment of an independent investigator” at the bank’s shareholders meeting on March 18.

($1 = 0.8766 euros)

(Reporting by Teis Jensen; Editing by Keith Weir)