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Estonian Danske Bank scandal reaches Sweden

Swedbank has become the latest international bank to be linked to the Danske Bank money laundering scandal in Estonia.

The allegations about Swedbank’s involvement follow reports on Swedish TV channel SVT, which claims to have uncovered documents that showed that at least 40 billion Swedish crowns (approximately 4.30 billion US dollars) had been transferred between accounts at Swedbank and Danske in the Baltics between 2007 and 2015.

“The information disclosed by SVT is very serious and together with our Estonian colleagues we will turn every stone to make a comprehensive and in-depth assessment. We will also invite our colleagues in the Latvian Financial Services Authority to participate in this joint investigation,” said Erik Thedéen, director general of Finansinspektionen (the Swedish Financial Services Authority).

“If we find that money laundering has taken place in a large Swedish bank, even if it was in the Baltics, it’s clear that we need to look at what role we had in this,” Mr Thedéen told Sweden’s TT News agency.

“We can confirm that, as the published information relates to Danske Bank, we are checking the claims as part of our investigation into Danske,” a spokesperson at Estonia’s state prosecutor’s office confirmed.

Swedbank CEO Birgitte Bonnesen told Reuters that she was comfortable with the safeguarding systems that the bank has in place and that it had reported everything it had discovered.

“We do everything we can and we do it constantly. We are a big retail bank. We are not a bank that focuses on a small number of non-resident customers that have a specific business model,” Ms Bonnesen is quoted as saying, adding, however, that she said she could not guarantee that the bank had been able to pick up everything.

According to a statement issued by the Estonian Financial Supervisory Authority (FI), Danske Bank did not operate alone, and transactions would have involved banks in other countries, although not all transactions would have been suspicious.

“Like any other bank, Danske was not able to act in isolation within the financial system. Obviously, payments have come to its customer accounts from other banks, payments have gone to other banks from Danske, therefore these transfers have connections to many different banks. This is also true with respect to any transfers of suspicious money. This does not automatically mean that the bank receiving payments from a theoretical case of money laundering has committed a crime.”

While Estonia has taken steps to address money laundering, it is an ongoing process and requires support from other FSA’s.

“Addressing serious AML risks has been our priority since 2014, and we have performed by decreasing substantially non-resident business, by closing major risks and guiding banks to up their risk control standards. We appreciate close cooperation with Sweden and other countries in addressing this potential legacy case,” said Kilvar Kessler, the chairman of FI.