EU Tells Denmark and Estonia to Adopt Money Laundering Rule or Face Court

(Bloomberg) -- The European Commission has ordered Denmark and Estonia to completely transpose the fourth anti-money laundering directive into national law or face a possible court battle.

“The European Commission considers it a matter of urgency that all the member states transpose this directive as fast as possible,” the commission said in a statement. “Gaps in one member state can have an impact on all others.”

Both Denmark and Estonia contested the commission’s statement, saying they had already implemented the directive.

The order follows a review by the European Commission into member countries’ adoption of the directive by a June 2017 deadline that found most hadn’t fully adopted the measure. Most now have, after the commission initiated infringement procedures against 21 countries. Denmark and Estonia remain behind, according to the commission.

Denmark and Estonian have two months to respond, or the commission said it may take further action, including a referral to the Court of Justice. It’s already done so for Romania and Ireland and plans to do so for Luxembourg.

“In our opinion, Estonia has fully transposed the fourth EU directive on AML,” the country’s finance ministry said by email in response to the order. “We have received the reasoned opinion of the European Commission and will respond within two months as required. We will explain in the response, how the particular articles have been transposed into Estonian legislation.”

Rasmus Jarlov, Denmark’s business minister, said that as far as he knows, the country already implemented the directive.

“But we’ll obviously answer whatever concerns the commission may have,” the minister told reporters in Copenhagen on Thursday. “We certainly haven’t ignored the directive and though I can’t rule out completely there might be one or two items that weren’t implemented correctly, my starting point is that we already implemented it.”

Danske Bank A/S, Denmark’s biggest bank, is under criminal investigations in the U.S., Denmark and Estonia for breaching money laundering laws. A large part of around $235 billion that flowed through a tiny Estonia unit of Danske’s over nine years was of suspicious origin, the bank said in a September internal probe.

©2018 Bloomberg L.P.

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