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Danske Bank pulls out of Russia, Baltics after money-laundering backlash

Credit: Reuters Studio
Published on February 20, 2019 - Duration: 01:29s

Danske Bank pulls out of Russia, Baltics after money-laundering backlash

Danske Bank will pull out of Russia and the neighbouring Baltic states, the Danish lender said after Estonia ordered it to close the branch at the centre of one of the largest-ever money laundering scandals.

David Pollard reports.

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Danske Bank pulls out of Russia, Baltics after money-laundering backlash

The Estonian branch of Danske Bank at the centre of one the largest ever money-laundering scandals .... Now to be closed, by order of Estonia's financial regulator.

That was Tuesday.

On Wednesday, Danske announcing it's to withdraw from not just Estonia, but Latvia, Lithuania and Russia too.

Danske is under investigation for more than 200 billion dollars of payments found to have flowed through its Estonian arm.

Its regional administrative back office in Lithuania is to stay .... Which means many of Danske's 3,000 employees in the region may keep their jobs.

But Estonia's chief financial regulator was heavily critical ..

Saying the alleged flouting of money-laundering rules had 'dealt a serious blow', to Estonia's reputation.

Last month, he also raised concerns that local banks should vet Estonia's e-residents: foreigners who have been given a digital identity card allowing access to online services.

(SOUNDBITE) (English) HEAD OF ESTONIAN FINANCIAL SUPERVISION AUTHORITY, KILVAR KESSLER, SAYING: "We, based on what's our role in Estonian society, we see also risks there.

So basically are we sure who are the residents, what is their background, if they are not connected to Estonia or Estonian economy.

And are you sure, you know, you are exercising enough duty of care, you as a bank, when you are onboarding the e-resident?" Estonia's regulators themselves are under scrutiny ... Along with those of Denmark.

The European Union's banking watchdog is running its own investigation into the alleged money-laundering .... over a possible breach of EU law.

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