Estonia AML Investigation Widens To Include Swedbank

Estonia’s investigation of money laundering involving Danske Bank is widening to include Swedbank, according to a report by Reuters.

Estonia is investigating allegations that link Swedbank to some suspicious transactions that involved Danske, Estonia’s state prosecutor said on Wednesday (Feb. 20).

Estonia isn’t the only one investigating Danske; Denmark, Britain, France and the U.S. are as well, relating to $226 billion in payments from former Soviet states and Russia through the branch in Estonia.

Now, A Swedish TV show said it found evidence that 40 billion Swedish crowns ($4.30 billion) were transferred between accounts at Danske and Swedbank between 2007 and 2015.

“We can confirm that, as the published information relates to Danske Bank, we are checking out the claims as part of our Danske investigation,” Estonia’s state prosecutor’s office said.

The Estonian Financial Supervisory Authority said that Danske had used other banks to facilitate the schemes, but that doesn’t mean other banks are or aren’t suspect.

“This does not automatically mean (or exclude) that a bank receiving payments in a possible money laundering operation has committed a crime or has breached the bank’s requirement to know its client and identify suspicious circumstances,” it said.

Swedbank CEO Birgitte Bonnesen that she had confidence in the bank’s safeguarding systems and that it had reported any type of suspicious malfeasance. However, she admitted that it’s possible something was missed.

“Was there any risk that a payment in 2007 slipped through? Yes, there is a risk,” she said.

Swedbank shares tumbled on the news — down 13.6 percent when the Stockholm Stock Exchange closed. It’s the biggest drop for the stock since the financial crisis.

The TV show that reported the news said the suspicious transactions by Swedbank customers should have been noticed because they were by companies that didn’t have any visible operations, beneficial owners or were being presented by people suspected of only being a front for organizations, known as “goalkeepers.”

“The investigation covers more than 1,000 of Swedbank’s clients in high-risk countries who are known from the money laundering scandal in Danske Bank,” broadcaster SVT said on its website.