Europe’s €200bn“dirty money” scandal
October 4, 2018 -- Flows of €200 billion of dodgy non-resident funds through Danske Estonia’s online transaction services between 2007 and 2015 represents more than a fifth of cross-border receipts through the Baltic state.
A decade ago, Estonia’s banks, eager to become a private banking hub for eastern Europe, moved from traditional private banking to transactional banking where money flows in and out immediately.
Estonia cross-border transactions, including non-resident flows, amounted to €887.6 billion between 2008 and 2015, according to figures from the country’s central bank.
The Wall Street Journal has reported that four big banks helped Danske Bank Estonia’s shady deals. JPMorgan, Bank of America and Deutsche Bank AG all made dollar transfers on behalf of the banks non-resident customers.
JPMorgan quit Estonian cross-border handling payments in July 2013, citing concerns about non-resident customers, and was replaced as the correspondent bank by Bank of America, while Deutsche pulled out in August 2015, having identified 10 Danske customers who had been involved in “suspicious behaviour”.
While the bulk of responsibility lies with Denmark’s regulator, the laundering scandal has now drawn in watchdogs in Europe and the United States.