Following articles in the Estonian and international press Finantsinspektsioon considers it important to emphasise that it carried out a series of on-site controls in the Estonian branch of Danske Bank in 2014. During these, Finantsinspektsioon found large-scale, long-lasting systemic violations of anti-money laundering rules in the Estonian branch of the Danish credit institution. In 2015, Finantsinspektsioon required by separate precept the bank to target these violations more effectively. As a result, the bank stopped providing services to non-residents in the volumes and format seen previously.
One of the general findings of the Financial Supervision Authority in 2014 was that the bank had not sufficiently analysed the non-resident client currently under discussion. The Estonian branch of Danske Bank did not provide any evidence in this process that it had carried out appropriate analysis internally that identified or raised doubts about the actual beneficiary of Lantana Trade LLP or its business. Among other things, the inaction towards this company was part of the subject of the reproach by Finantsinspektsioon against the bank.
Possibly misleading the financial supervisory institution in supervision proceedings is a serious violation, if Danske bank had additional information on this client but did not disclose it during the on-site inspection. Finantsinspektsioon is considering starting procedures to investigate this. By law financial supervision proceedings are not public.
As a financial supervisory institution, Finantsinspektsioon focuses on the legal compliance of regulated financial intermediary organisations and on assessing their functioning.
Risk-taking and risk-control functions (the internal control system) should be in balance and mutually sufficient. As a rule Finantsinspektsioon does not investigate individual cases of suspected criminal activity, as this is done by law enforcement authorities, with which the financial supervisory institution works closely.
Under European Union law, supervision of Danish credit institutions, including their internal control systems as whole, is the responsibility of respective Danish authorities. The Estonian financial supervisory institution has limited responsibility concerning incoming branches of European Union credit institutions operating in Estonia. Finantsinspektsioon exercised its responsibilities and by its actions terminated the significant money-laundering risks stemming from the Estonian branch of Danske Bank in 2014/2015. The Danish financial supervisory institution has been informed of this.
Please note that this text is translation from Estonian original, which is prevailing.