• 322 days Could Crypto Overtake Traditional Investment?
  • 327 days Americans Still Quitting Jobs At Record Pace
  • 329 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 332 days Is The Dollar Too Strong?
  • 332 days Big Tech Disappoints Investors on Earnings Calls
  • 333 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 334 days China Is Quietly Trying To Distance Itself From Russia
  • 335 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 339 days Crypto Investors Won Big In 2021
  • 339 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 340 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 342 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 343 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 346 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 347 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 347 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 349 days Are NFTs About To Take Over Gaming?
  • 350 days Europe’s Economy Is On The Brink As Putin’s War Escalates
  • 353 days What’s Causing Inflation In The United States?
  • 354 days Intel Joins Russian Exodus as Chip Shortage Digs In
The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030

The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030

According to Citigroup, the metaverse…

China Is Quietly Trying To Distance Itself From Russia

China Is Quietly Trying To Distance Itself From Russia

Western sanctions against Russia are…

Intel Joins Russian Exodus as Chip Shortage Digs In

Intel Joins Russian Exodus as Chip Shortage Digs In

"Intel continues to join the…

  1. Home
  2. News
  3. Breaking News

Another European Bank Falls To Russia-Linked Money Laundering

Corruption

The CEO of Danske Bank has resigned over hundreds of billions in money from Russia and former Soviet states allegedly laundered through its small branch in Estonia.

It’s a sum that is likely to draw significant attention from Washington amid calls for new sanctions on Russia, which could threaten to cut the bank out of the global financial system.

Nor would it be the first time: When the U.S. accused a Latvia bank earlier this year of covering up money laundering, the bank was denied U.S. dollar funding for transactions and it collapsed shortly afterward. For Danske, the situation is slightly different because it does not have a U.S. banking license, but still, it is a correspondent bank and we might be seeing its final days in the global financial network.

Only the specter of U.S. involvement over the past six months leading up to Wednesday had shaved one-third off the bank’s value as investors cut and run.

Now that the results of the investigation have been revealed, the bank’s shares are in free fall:

(Click to enlarge)

As for the CEO, he hasn’t been directly implicated.

“Even though I was personally cleared from a legal point of view, I hold the ultimate responsibility. There is no doubt that we as an organization have failed in this situation and did not live up to expectations,” Reuters quoted Borgen as telling a press conference.

Borgen will remain in his position until a new CEO is appointed. Related: Hacks, Bugs And Exploits: Growing Pains For The $4 Billion Blockchain

But Europe definitely has a Russian money-laundering problem that it can’t get out in front of.

According to a recent case study by Allan & Associates, the European Central Bank has been grappling with this for the past decade—to little success.

“The influence of the Russian-linked criminal funds in peripheral EU states is now exposing the ECB’s limitations in this regard,” the report said.

The Latvian case stands out as an embarrassing reminder of this state of affairs—and it went beyond Russia and into North Korea.

In February, the ECB ordered the closure of ABLV, the third-largest bank in Latvia. But it wasn’t due to ECB efforts—it was the U.S. Treasury Department stepped up the heat on this, leaving the ECB no choice but to close the bank down over money laundering, including violations of international sanctions on North Korea.

According to Allan & Associates, even the Latvian authorities had fined two banks prior to this for violating sanctions, but the ECB dialed to step in, pushing the responsibility fully on its member states. More to the point, the ECB said it didn’t have “the investigative powers to uncover such deficiencies”.

Related: Is A Market Meltdown Looming?

Nor is it just Latvia and now Estonia. Last year, the FBI was investigating a Cypriot bank for money laundering on behalf of wealthy Russians. The bank is now shut down. Malta is also constantly under scrutiny for lack of transparency.

And the most famous case was that of Russian auditor Sergei Magnitsky who was arrested in Russia on dubious tax evasion charges in 2008 while investigating state-sanctioned money-laundering through Cyprus and Latvia. He then died in prison. This incident prompted the U.S. Congress in 2012 to sign the Magnitsky Act, which is used to block targeted Russian government officials and businessmen from entering the U.S., freeze their U.S. assets and ban their use of the U.S. banking system.

This Act itself is the most telling witness to the European Central Bank’s impotence when it comes to money-laundering and cross-border crime.

By Fred Dunkley for Safehaven.com

More Top Reads From Safehaven.com

Back to homepage

Leave a comment

Leave a comment