Danske Bank scandal needs full accountability, not scapegoating

Issued by Transparency International Secretariat

Updated at 18:40 on 20 February 2019



Transparency International welcomes the European Banking Authority’s decision to investigate the Danish and Estonian financial supervisory authorities concerning their work over Danske Bank. Responding to a request from the European Commission, the regulator announced yesterday it will seek to determine if the two have breached European Union law by failing to act upon the apparent money laundering through the Bank’s accounts.

“We expect for this investigation to confirm that both financial supervisors have failed to protect the European Union and, by extension, our interconnected world, from dirty money,” said Maíra Martini, Knowledge Coordinator at Transparency International. “The European Union will need to identify all at fault in order to learn from this bitter lesson.”

Following the decision, the Estonian financial supervisor promptly ordered Danske Bank to close its notorious Tallinn branch, stating that the scandal was “the greatest blow to the transparency, trust and reputation of the Estonian financial market.”

While both Estonia and Denmark received good marks on the Corruption Perceptions Index 2018, Transparency International highlighted how countries with the cleanest public sectors have been enabling grand corruption around the world. These two countries, in particular, have become easy targets of individuals and companies behind the illicit US$230 billion funneled through Danske Bank.

In 2014, well before courageous whistleblowers and investigative journalists unveiled the Danske Bank scandal, the Estonian financial regulator had a crucial opportunity to act when their inspections identified the branch’s failure to comply with anti-money laundering rules.

“The response of Estonia’s financial supervisory authority suggests that they do not accept responsibility for supervising banks operating in their territory,” Maíra Martini argued. "Shutting the branch down years later does not absolve them of the responsibility to investigate and stop billions in dirty money from flowing freely through its accounts. They should investigate and cooperate with the authorities to identify companies and individuals behind the money.”

Denmark’s financial supervisory authorities responded with a statement expressing disappointment that their Estonian counterparts were distancing themselves from a shared responsibility. However, it’s important to emphasise that Danish authorities have a responsibility to ensure all branches of Danish banks meet anti-money laundering standards, and that investigations continue into the failings in this particular case.

The scapegoating and the back-and-forth between the two authorities demonstrates the need for stronger EU-wide anti-money laundering supervision.

 

Background

The Tallinn branch of Danske Bank is at the centre of Europe’s biggest money-laundering scandals. Between 2007 and 2015, around US$230 billion, including US$2.9 billion associated with Azerbaijan’s ruling elite, of illegal money was laundered through the branch.

In September 2018, the internal investigation of Danske Bank found that its Estonian branch was “misused for suspicious transactions” and that the Bank “reacted too late and too slowly.” These findings prompted its CEO’s resignation.

Last year, Estonian and Danish prosecutors launched criminal investigations. In November, Danske Bank was preliminarily charged with breaking Denmark’s anti-money laundering laws. Investigations in Estonia have so far resulted into arrests of branch's ten employees.

 


For any press enquiries please contact

E: press@transparency.org
T: +49 30 34 38 20 666

Latest

Support Transparency International

The terrible consequences of police corruption in South Africa

What do we do when those mandated to protect us are serving other interests than public safety and security? In South Africa, police corruption leaves the public exposed to high rates of crime, and causes distrust of the police service while allowing crime to flourish.

Why do DRC citizens report such high levels of corruption?

People's experiences with corruption in the DRC are far worse than in most other African countries. Why is corruption so prevalent in the DRC, why is bribery so commonplace and why do two thirds of citizens feel powerless?

Is Mauritius at a tipping point in the fight against corruption?

According to the latest GCB for Africa, very few Mauritians who accessed public services, like health care and education, had to pay a bribe for those services. But given recent scandals, citizens still see certain groups and institutions as corrupt.

Countries must be more transparent when investigating transnational corruption

Supervisory and justice systems should be transparent and accountable so that the public can assess their performance.

Resilient institutions

Reducing corruption is an important component of the sustainable development agenda, and one that all state parties have an obligation to address. Although corruption is often thought of as a ‘third-world problem’, institutions in the Global North play an important role in the corruption cycle, and are therefore an essential part of the solutions.

In whose interest? Political integrity and corruption in Africa

What accounts for the wide disparity in peoples’ perceptions of the integrity of elected representatives in different countries? In this piece, we will to look at various forms of political corruption, how they manifest in African countries and what can be done to promote political integrity.

Cidadãos opinam sobre a corrupção em África

A décima edição do Barómetro Global de Corrupção (GCB) – África revela que embora a maioria das pessoas na África acreditem que os níveis de corrupção aumentaram no seu país, elas também se sentem otimistas, pois acreditam que os cidadãos podem fazer a diferença no combate à corrupção.

Les citoyens africains expriment leur opinion sur la corruption

La 10e édition du Baromètre mondial de la corruption – Afrique révèle que la plupart des Africains pensent que la corruption a augmenté dans leur pays, mais aussi que la majorité d’entre eux s’estiment capables, en tant que citoyens, de changer la donne dans la lutte contre la corruption.

Global Corruption Barometer - Africa 2019

The Global Corruption Barometer (GCB) – Africa reveals that more than half of all citizens surveyed in 35 African countries think corruption is getting worse in their country. 59 per cent of people think their government is doing badly at tackling corruption.

Citizens speak out about corruption in Africa

The Global Corruption Barometer (GCB) – Africa, reveals that while most people in Africa feel corruption increased in their country, a majority also feel optimistic that they can make a difference in the fight against corruption.

Social Media

Follow us on Social Media