Estonia Must Seek Damages for Danske Scandal, Justice Chief Says
(Bloomberg) -- Estonia must seek compensation for damage to its reputation from one of Europe’s largest money-laundering scandals, which emerged from the country’s branch of Danske Bank A/S, Justice Minister Urmas Reinsalu said.
Danske is already subject to multiple criminal investigations, including by the U.S. Justice Department, and potentially faces billions of dollars in fines. A probe commissioned by Copenhagen-based Danske and published in September found that a large part of about $230 billion that flowed through a non-resident unit in Estonia from 2008 to 2015 was suspicious in origin.
Reinsalu ordered an analysis of “all legal options, including those that emerge from international cooperation,” he wrote in an email to Bloomberg. “The Danske laundering scandal has damaged Estonia’s reputation and we have to look for ways to get compensation.”
Estonia’s ruling coalition, which includes Reinsalu’s Isamaa party as a junior member, could be replaced after parliamentary elections on March 3. Still, members of the ruling Center Party, which is vying for the premiership in a tight race with the opposition Reform Party, also raised the specter of compensation last year.
The Danish lender last Tuesday announced a retreat from the Baltic region as well as Russia just hours after the Estonian financial watchdog ordered Danske to leave the country within eight months. The case has also led to accusations by the supervisory authorities in Estonia and Denmark over who should have done what, and when, in overseeing Danske.
The European Banking Authority said last week it has launched a formal investigation into both supervisors.
Estonian Premier Juri Ratas last week pledged a policy of zero tolerance on money laundering. He said the risks for the nation’s banks had shrunk from the pre-2015 period, when asked to comment on a report by Swedish broadcaster SVT alleging Swedbank AB helped transfer 40 billion kronor ($4.3 billion) in illicit funds from Danske between 2007 and 2015.
©2019 Bloomberg L.P.