Some 200 billion euros ($226 billion) of suspicious payments
from Russia and other states flowed through the Estonian branch
of Danske Bank, which is already being investigated in Denmark,
Estonia, Britain and the United States, between 2007 and 2015.
This has raised questions about supervision of the Danish bank,
prompting the EU's executive European Commission to ask the
European Banking Authority (EBA) last September to investigate a
possible breach of EU law by Estonia's Financial Services
Authority and the Danish Financial Services Authority.
EBA Interim Chair Jo Swyngedouw said in a letter dated Feb. 18
that following a preliminary inquiry the watchdog had decided to
open a formal investigation into the Estonian Financial Services
Authority, which is known as Finantsinspektsioon, and the Danish
Financial Services Authority.
Meanwhile, Estonia's financial supervisory authority said it has
ordered Danske Bank to close its Estonian operation within a
period of eight months.
It said in a statement that Danske Bank had broken money
laundering rules "for years", adding that the maximum penalty if
the Danish bank did not comply with the closure order was 10
percent of group turnover.
Danske Bank, which was not immediately available for comment,
has said it has started to close down its Estonian business
after realizing the extent of alleged money laundering.
The EBA's investigation into the regulators will take two
months, and if it finds a breach of EU law, it can make
recommendations to them to address failings.
Last year, the EBA made recommendations to the Maltese Financial
Intelligence Analysis Unit after establishing a breach of EU law
in relation to its supervision of anti-money laundering
requirements at Pilatus Bank.
(Reporting by Huw Jones in London and Tarmo Virki in Tallinn;
Editing by Rachel Armstrong and Alexander Smith)
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