Compliance Corner - Danske Bank

Tom Burroughes

8 February 2019

Danske Bank
is being formally investigated by a top French court as probes into the lender's alleged involvement in a major money laundering scandal continue.

The Copenhagen-headquartered bank said yesterday it has been placed under formal investigation by an investigating judge at the Tribunal de Grande Instance de Paris. The probe relates to certain transactions in portfolio of non-resident customers of Danske Bank’s branch in Estonia in the period from 2007 to 2014.

The investigation covers transactions amounting to around €21.6 million ($24.5 million). Danske Bank has been ordered to post bail in the amount of €10.8 million.

Investigations into Danske have been going on for more than a year, and the saga has led to the resignation in September 2018 of Thomas Borgen, its chief executive. The case, along with other money laundering problems and claims in countries such as Latvia and Malta, has prompted some figures to argue that national controls against dirty money are not fit for purpose.

Danske said that a report, date 19 September last year, prepared by Danish law firm Bruun & Hjejle, had showed shortcomings and failures, but an examination into the terminated portfolio of non-resident customers "has made no findings which enable it to conclude whether money laundering, tax evasion or other criminal activity has actually taken place".

Danske Bank was first placed under formal investigation in France on 11 October 2017. On 25 January 2018, Danske Bank’s status in the investigation was changed to that of an assisted witness.

The bank added it will continue to co-operate with French authorities.