COPENHAGEN (Reuters) - Denmark’s top lender Danske Bank (DANSKE.CO) said Thursday it had been fined 12.5 million Danish crowns ($2 million) for violating anti-money laundering rules in relation to the monitoring of transactions to and from correspondent banks.
The bank also said it was examining whether its Lithuanian and Latvian branches had been involved in money laundering, expanding an investigation beyond its Estonian operations.
Denmark’s financial regulator reported Danske Bank to the police last year for violating anti-money laundering rules and reprimanded the bank for not identifying or reducing “significant money laundering risks” in its Estonia branch.
The fine, which Danske Bank accepted, relates to that charge by the financial regulator but is unrelated to its activities in Estonia.
Danish newspaper Berlingske had reported that the bank’s Lithuanian branch had been used in 2012 as part of money laundering and other illegal activities in Estonia.
Danske Bank said in September it had had inadequate measures in place in Estonia to prevent money laundering in the period up to 2014 and said it was cooperating with the authorities in the money laundering cases.
Danske Bank head of compliance Anders Meinert Jorgensen said in an email the Estonia case had prompted the bank to “look at the other Baltic markets,” and said this could prompt a deeper investigation depending on its initial findings.
“The challenges around money laundering and non-resident customers are linked to a certain portfolio we had in Estonia at that time,” he said, adding that issues in Lithuania and Latvia could “not be equated with those in the Estonian branch.”
A spokesman said Danske Bank began looking into activities in Lithuania and Latvia after the Estonian investigation started in September, adding it would take nine months to a year.
French authorities placed Danske Bank under an anti-money laundering investigation in October based on suspicions over transactions by customers of Danske Bank Estonia from 2008 to 2011.
Danske Bank hired the former head of Denmark’s intelligence agency and fraud squad, Jens Madsen, in September to help it in its effort to counter money laundering.
“Anti-money laundering work is complex and comprehensive, and historically we have not been competent enough in this area everywhere,” Jorgensen said in his email.
($1 = 6.2662 Danish crowns)
(The story was refiled to correct the first paragraph to read “...the monitoring of transactions to and from correspondent banks.” instead of “...illegal activities at its overseas branches.”)
Reporting by Jacob Gronholt-Pedersen; Editing by Edmund Blair