The Danish government wants to ensure that its Financial Supervisory Authority will no longer turn a blind eye to the violation of transparency principles, following a 230 billion money-laundering scandal involving major non-resident money flows through the Estonian branch of Danske Bank, the largest retail bank in Denmark.
Denmark’s financial regulator failed to ensure the transparency of the banking system for several years, which later prompted the Organized Crime and Corruption Reporting Project (OCCRP) to name Danske Bank the most corrupt bank of the year for its role in helping criminals and corrupt officials from former Soviet republics – namely Russia, Ukraine, Azerbaijan, and Kazakhstan – hide their assets and legitimise their operations.
According to the OCCRP, Danske Bank also played a key role in assisting everyone from Mexican drug cartels to terrorists in helping to launder money. Denmark’s business minister said the government in Copenhagen intends to strengthen its oversight.
In September 2018, the Wall Street Journal begun reporting on a probe initiated by US authorities over allegations of massive money laundering flows from Russia and former Soviet states via the lender’s Estonian branch. The probe was triggered by a whistleblower, who also provided evidence of the involvement of Deutsche Bank and Citigroup in the money laundering scheme.
The name of the whistleblower was later revealed to be Howard Wilkinson, who went on to criticise the Danish watchdog’s performance during the scandal after he argued that it was actively protecting the Danske Bank.
The speculation was further fuelled, at the time, by the fact that the regulator’s chairman was Henrik Ramlau, Danske’s ex-finance director.
Ramlau’s successor at the Financial Supervisory Authority, Jesper Berg, has been more open about the damage inflicted by the regulatory scandal, saying, “I think people who know us just a little bit would know that the integrity in this institution is incredibly high, by any standard,” but that more needs to be done to crack down on those with a conflict of interest.