The Danish Ministry of Industry, Business and Financial Affairs has today to the Danish Parliament sent two documents from the historical correspondence with the Estonian Financial Supervisory Authority (EFSA) on the AML supervision of Danske Bank’s Estonian branch.
The Danish Ministry of Industry, Business and Financial Affairs has asked the Danish FSA whether it is possible to publish the two documents in order to contribute additional information on the course of events with a view to the political decision process.
At recent meetings between the European Parliament’s TAX3 Committee and the Danish Financial Supervisory Authority and the Danish Minister for Industry, Business and Financial Affairs, respectively, doubts were raised concerning the course of events in the case based on information from Estonia. Questions were also raised from the Danish Parliament to the Minister regarding the division of responsibility between the Danish FSA and EFSA in continuation of the publication of the Danish FSA’s report of 29 January 2019 on the supervision of Danske Bank in Estonia and the subsequent comment from EFSA.
Both the now published documents are described in the Danish FSA’s report.
The Legal Adviser to the Danish Government has assessed that, in light of the above course of events, it is possible to publish the two documents in their entirety without violating the Danish FSA’s statutory duty of confidentiality.
Letter regarding inspection in 2009
The first document is a letter from EFSA to the Danish FSA of October 2009, in which EFSA informed the Danish FSA of the results of an AML inspection in the Estonian branch. Among other things, EFSA concluded that the branch was aware of the AML risks and had taken measures to deal with AML risks in line with the highest international standards and which were appropriate in order to maintain the non-resident customers. EFSA also concluded that EFSA had found some weaknesses, but did not find serious shortcomings or problems, and that the problems identified in 2007 appeared to have been handled.
EFSA’s conclusions must be considered in light of the fact that, as described in the Danish FSA’s report of 29 January 2019, employees in the Estonian branch had by all accounts for many years actively carried out and covered up the offences, both towards the bank’s top management in Copenhagen and towards EFSA. Therefore, the Danish FSA has not found any reason to question EFSA’s work in this respect.
Offer to EFSA to participate in inspection in 2013
The second document is a letter of 17 April 2013 from the Danish Financial Supervisory Authority to EFSA. In this letter, the Danish FSA referred to the discussions with EFSA in 2012 about Danske Bank and to the bank’s then explanations, which had also been sent to EFSA. The Danish FSA also stated that it could be relevant for EFSA to carry out an AML inspection in the branch. Finally, the Danish FSA offered to participate in such an inspection in the branch.
As described in the Danish FSA’s report of 29 January 2019, EFSA carried out two AML inspections in the branch in 2014, which resulted in Danske Bank terminating the portfolio of non-resident customers. EFSA therefore had the competence to stop the offences when EFSA became aware of these in 2014 and was not dependent on possible measures from the Danish FSA in Denmark. The course reflects the division of responsibility as laid down in EU legislation.