The European bank is widening the scope of its probe into claims around money laundering via its Estonia branch.

Danske Bank, the Copenhagen-headquartered firm embroiled in the so-called "Azerbaijani Laundromat" scam, has widened the scope of its probe into events at the Estonia branch where alleged illicit transactions are said to have taken place.

Earlier this month, reports by the Organized Crime and Corruption Reporting Project and various media outlets showed there was a scheme to allegedly move about $3 billion from sources in Azerbaijan, using accounts at the Estonia branch of Danske Bank, to shell companies registered in the UK that made payments to Azerbaijanis abroad and to European politicians from 2012 to 2014.

The OCCRP organisation said on its website about the saga: "Records show that Danske Bank, a major European financial institution, turned a blind eye to transactions that should have raised red flags. The bank’s Estonian branch handled the accounts of all four Azerbaijani Laundromat companies, allowing the billions to pass through it without investigating their propriety."

Yesterday, Danske said it was expanding its investigation into the situation at its Estonian branch.

"The background is a root cause analysis concluding that several major deficiencies led to the branch not being sufficiently effective in preventing it from potentially being used for money laundering in the period from 2007 to 2015. The expanded investigation covers customers and transactions at the Estonian branch in that period," the bank said in a statement.

"It was major deficiencies in controls and governance that made it possible to use Danske Bank’s branch in Estonia for criminal activities such as money laundering. This is the conclusion of a root cause analysis of the situation at the Estonian branch in the period in question performed by Promontory Financial Group, a regulatory consulting firm. The analysis was performed at Danske Bank’s request," it continued.

“Today, the management in place in Estonia maintains a much stronger focus on this area, and independent control functions have been established along with much better procedures and controls,” group chief executive Thomas Borgen said,

“So today, things are completely different. Although we leave it to the authorities to conclude whether money laundering did in fact take place, there is no doubt that we were not sufficiently effective in preventing our branch in Estonia from potentially being used for such activities. This of course is deeply regrettable and completely unacceptable," he added.

The lender provides a range of services including private banking and wealth management. It recently released financial results (see here).