The European Commission will ignore the European Banking Authority (EBA) and continue with a probe into how national regulators “missed” a €200 billion money-laundering scandal that involved Danske Bank and several illicit deposits from several post-Soviet countries that took place for over a decade.

The Commission said the EBA “undermined its own credibility” by ruling to shut down the investigation on 16 April after Danish and Estonian financial regulators breached European law and made recommendations for remedial action. Instead of taking its own report into account, the EBA board of supervisors rejected the internal draft and voted to close down the investigation as they felt that both the Danish and Estonian supervisors were not in breach of EU law.

The decision by the EBA was condemned by the European Commission Vice President responsible for financial services policy, Valdis Dombrovskis, who called for an institutional overhaul of the institution to increase its accountability.

In a letter to the Commission, dated 26 April, the EBA’s board claimed that national supervisors acknowledged their failings but did not admit to violating any European laws.

Europe’s Justice Commissioner Vera Jourova has said that “the case of Danske Bank is not closed for us, regardless of the decision of EBA,” adding that she “will make sure that this case will not be swept under the carpet.”

The European Commission has already launched “infringement proceedings” against Denmark and Estonia for failings to adopt and implement EU anti-money laundering regulation. The EBA’s mandate is to check that national authorities enforce EU rules and carry out investigations, but the Danske Bank case casts doubt over the ability of the institution to carry out its duties.

In the days since the Commission announced that it would begin proceedings against the banking authorities in Denmark and Estonia, reports have emerged that Russia’s Central Bank sent warnings in 2007 and 2013 to both Estonian and Danish financial supervisors suggesting that billion-dollar transactions were taking place at the Estonian branch of Danske Bank.

These warnings were, however, largely ignored, a previously confidential EU document has revealed.

The document cites two internal communications between the Russian Central Bank and the Estonian and Danish supervisors in 2007 and 2014, where Moscow was raising red flags about illicit transactions through the Estonian branch of Danske Bank.