Danske Bank Pays Over $2 Billion in Penalties for Money Laundering Scandal

Denmark’s Danske Bank, one of Europe’s largest financial institutions, is set to pay over $2 billion in penalties combined to U.S. and Danish authorities due to significant Anti-Money Laundering (AML) failings.

Background

• Danske Bank, a major player in the EU, Baltic, and Nordic regions, agreed to pay penalties amidst allegations of AML lapses.
• The bank’s Tallinn, Estonia branch was at the heart of a massive money laundering scandal.
• Intense scrutiny began in 2018 as the financial crime scandal shook the entire European financial sector.

Key Concerns

• Danske Bank failed to screen transactional data from its Tallinn branch between 2007 and 2015.
• An estimated $230 billion in suspicious transactions flowed through the bank, some believed derived from criminal activities.

Consequences and Regulatory Response

• The departure of Danske Bank’s Chairman and CEO.
• An investigation from the European Central Bank into the bank’s Tallinn branch.
• A separate probe by Estonian authorities.

“This is a wake-up call for financial institutions worldwide.”

• Ken Berry, ACFCS President

Penalties and Fines

• U.S. Department of Justice and the Securities and Exchange Commission (SEC): Combined penalties of $1.3 billion for willful violation of the Bank Secrecy Act.
• Danish Financial Supervisory Authority: A penalty of around $850 million.

Implications

• This case highlights the importance of financial institutions adhering to AML regulations.
• Consequences of falling short can reach far and wide, impacting both the industry and regulatory bodies worldwide.