The biggest banking scandal in the modern history of Denmark continues to add new unexpected shades to the story. The scope of the Danske Bank money laundering scandal is greater than expected according to the Danske Bank CEO. Back in 2009, the bank was involved in a criminal case about illegal trafficking of North Korean weapons.
The Danske Bank’s Estonian branch was already involved in a criminal case concerning illegal trade of North Korean weapons in 2009. The UN Security Council assessed in a report in 2013 that the case was a clear breach of sanctions against North Korea, and according to an expert, the case should have been an eye opener for Danske Bank.
The money laundering scandal has been uncovered by Danish Media Berlingske for the past year and a half. According to the newspaper at least DKK 25 billion from Russia and the regime in Azerbaijan have been laundered in Danske Bank’s branch in the Estonian capital, Tallinn, during 2010-2014.
Danske Bank CEO Thomas Borgen has recently stated that the scope is greater than assumed.
In 2009, a freighter from North Korea was detained in Thailand’s capital, Bangkok, after foreign intelligence services warned the Thai authorities that the plane’s cargo was not the illuminated mechanical parts, but instead North Korean weapons.
The freighter attempted to smuggle 35 ton of weapons. So far, this is one of North Koreas worst breach of UN sanctions. One of the key companies in the arms trade was the New Zealandic SP Trading Ltd. A company with an account in Danske Bank in Estonia – and the company that leased the freighter.
The UN later concluded that the account in Danske Bank was not used for transfers in connection with the failed arms trade. However, the account was used for suspicious transfers with a British Virgin Islands company, which, according to the United Nations, indicated money laundering.
“It is clear that we have had customers we should never have had and that transactions have been completed which we should have stopped,” Danske Bank CEO Thomas Borgen states to DR.
The new information on the bank’s role in the arms trade case, which Berlingske has investigated in collaboration with DR, shows that there may be more scandals hidden in the Danske Bank’s Estonian branch.
“This case once again emphasizes that all types of suspicious customers were welcome in the Danske Bank’s Estonian branch,” states Jakob Dedenroth Bernhoft, Director of Revisorjura.dk, and expert in money laundering.
DR writes that Danske Bank has launched two internal investigations concerning the lack of control of customers and cash flows in the Estonian branch. One investigation is about the bank’s management culture – who knew what and when in the years when the suspicious transactions took place. In the second investigation, the bank is looking into transactions back to 2007, when the Danske Bank Group acquired the branch in Estonia as part of the acquisition of Finnish Sampo Bank.
The investigations must be completed by September 2018.