The Danish Financial Supervisory Authority (Danish FSA) on Thursday announced that it would relaunch a money laundering probe into Danske Bank after Denmark's largest lender said that a "large part" of transactions totalling €200 billion at its Estonian branch were "suspicious." A British agency is also launching an investigation into a UK entity with links to the branch.
Danske Bank on Wednesday said that it was unable to determine how much money was allegedly laundered through the Estonian branch between 2007 and 2015.
"We are reopening the investigation into the bank that we closed in May," Jesper Berg, director general of the Danish FSA, told broadcaster TV2 on Thursday, a day after Danske Bank's CEO resigned over the scandal.
"When we receive new information, we can review it and see if there is anything else we need to examine," he added.
In May, the Danish FSA denounced "serious shortcomings" at Danske Bank's Estonian branch and ordered it to raise its capital requirement by five billion kroner, or €670 million, due to increased risks.
The bank launched an internal probe into the €200 billion of transactions that had transited its Estonian branch through the accounts of 15,000 non-resident clients, but it was unable to explain exactly where the money came from, saying only that 23% of the incoming funds were from Russia.
"A large part of the flow [transactions] is suspicious," said Ole Spiermann, a partner at the external law firm that carried out a probe for Danske Bank.
In early August, the Danish State Prosecutor for Serious Economic and International Crime (SØIK) said the bank was being investigated over the alleged laundered money, most of which came from Russia and other former Soviet states.
UK agency to probe entity linked to Estonian Danske branch
The UK's National Crime Agency (NCA), meanwhile, has launched a criminal investigation into a UK entity with links to the Danske Bank branch at the centre of a money laundering scandal, the Financial Times said.
It said that the investigation, thought to be the first by UK authorities to centre on events at Denmark's biggest lender, comes as Danske is facing increasing scrutiny around the world over a money laundering scandal centred on its Estonian branch.
The NCA's interest is trained on a UK-registered limited liability partnership, or LLP, according to people with knowledge of the investigation. By geography, UK corporate entities were the second-biggest proportion, behind Russian, of 15,000 non-resident customers at the Estonian branch of Danske, the bank revealed this week.
"The NCA is aware of the use of UK-registered companies in this case and has related ongoing operational activity," the agency said. "The threat posed by the use of UK company structures as a route for money laundering is widely recognised and the NCA is working with partners across government to restrict the ability of criminals to use them in this way."
The NCA, which is the lead agency tackling organised crime and dirty money in the UK, declined to comment further. Danske likewise declined to comment.
According to Danske's own findings regarding its money-laundering scandal, which were published earlier this week, UK entities overtook Russian customers at the Estonian branch in 2013, peaking at 1,100. While the corporate structures were registered in the UK, they could ultimately be controlled by individuals anywhere in the world. In addition, the UK was among the top five countries from which funds flowed into the Estonian branch's non-resident accounts.
An audit ordered by Danske Bank showed that the bank's non-resident customers moved over €200 billion. The audit idenitifed that most of the 10,000 non-resident customers of the bank's Estonian branch were suspicious and it is likely that most of the transaction flow of the bank was also problematic.
Danske has reported eight former bank employees to the Estonian police in connection with the suspicious activity. 42 employees and agents have been deemed to have been involved in some suspicious activity.
Thomas F. Borgen on Wednesday morning announced his resignation as CEO of Danske Bank.
Editor: Aili Vahtla