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A major Danish bank’s operations in Estonia are facing allegations of laundering as much as $8.3 billion.5 July 2018
The illegal transactions at Danske Bank’s Estonian operations allegedly occurred from 2007 to 2015, with the amount laundered representing around a third of the bank’s overall market value, Bloomberg reports.
The revelations were first brought to light by Danish newspaper Berlinske and UK media in February, with the bank initiating its own internal probe in response, reports bne Intellinews.
According to a separate Bloomberg story, it was previously thought that about $4 billion was laundered, but as more details emerge, the scale of the illegal transactions keeps increasing.
Investor and Kremlin critic Bill Browder said some of the laundered money was linked to a corruption scheme exposed by Sergei Magnitsky, a lawyer for Browder’s Hermitage Capital Management fund. Magnitsky’s death in a Russian prison in 2009 eventually led to the U.S. “Magnitsky Act” sanctioning Russian economic interests.
Browder believes Russian, Moldovan, and Azerbaijani entities used Danske’s Estonian branch to launder money, Bloomberg says.
“It’s crucial to know how big a profit has come from the laundering,” Danish Business Minister Rasmus Jarlov told Bloomberg. “It’s obviously not satisfactory that large sums of money were made laundering funds and that that money is still with Danske Bank. This offends my sense of justice, and everyone else’s.”
Danske’ return on capital for its non-resident portfolio in Estonia was an eye-opening 402 percent in 2013, according to figures provided by the Danish regulator. Its overall return for the year was 6.9 percent.
“The newly revealed large scale of money laundering at Danske Bank broadens the scope of interest in unmonitored money flows from Russia and other countries of the former Soviet Union – such as Moldova or Azerbaijan, as is reportedly the case of the Danske Bank laundromat – into the European Union via the Baltic states,” Intellinews writes.
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