Ten years after an ICIJ exposé, Danish authorities charge Nordea bank with money laundering violations

Danish authorities last week indicted Finland-based Nordea, one of Northern Europe’s largest banks, for violating anti-money laundering laws by failing to stop $3.7 billion of suspicious transactions involving Russian clients, shortcomings previously exposed by an International Consortium of Investigative Journalists’ investigation a decade ago.

The indictment, by the Danish Special Crime Unit (NSK), covers transactions that took place from 2012 to 2015 and is the result of an investigation that lasted nearly eight years.

“Nordea failed to adequately investigate the bank’s Russian customers’ transactions and ignored warnings about transactions to exchange offices in Copenhagen,” the NSK said in a statement.

The charges represent the most extensive violation of Denmark’s anti-money laundering act ever committed in the country’s banking sector, according to the agency.

In a press release, Nordea said it has cooperated with the authorities and expects to be fined. The bank added, however, that it “does not agree with the content of the charges nor the legal assessment.” It said that, in recent years, “Nordea has invested heavily in fighting money laundering” and other financial crimes.

In 2013, as part of the Secrecy for Sale exposé, ICIJ’s Danish media partner Politiken revealed that the services of Nordea’s Copenhagen branch were instrumental in assisting Russian nationals and others in maintaining about 100 offshore companies.

According to Politiken, the bank’s clients included two Russian and one Ukrainian financial services providers that helped the individuals set up companies in the British Virgin Islands and other jurisdictions known for their corporate secrecy laws. The providers then used Nordea’s services to help the offshore companies’ beneficial owners pay the bills for their businesses. This arrangement allowed Nordea to be responsible for carrying out due diligence only on its direct clients, the Russian and Ukrainian firms, not the ultimate users of its services, the beneficial owners of the offshore companies, Politiken reported.

The newspaper’s findings were based on a cache of 2.5 million financial records obtained by ICIJ and shared with reporting partners in 58 countries as part of the Secrecy for Sale investigation into offshore finance.

Australia-based businessman Geoffrey Taylor, who has reportedly been linked to numerous shell companies as well as international money laundering and drug trafficking probes, was among the individuals identified by Politiken as using Nordea’s services. (Taylor’s son once told reporters that only a “handful” of shell companies had been misused.) Politiken reported that Taylor had used Nordea’s Danish branch to pay the bills for a BVI company he had set up with a Russian national as a co-owner.

In response to the Politiken investigation, at the time, Nordea said it complied with the country’s anti-money laundering and anti-terrorism regulations.

The Danish crime agency, NSK, said in its statement that no individual has been charged. The case will be brought before the district court in Copenhagen.

Article Credit: https://www.icij.org/investigations/offshore/ten-years-after-an-icij-expose-danish-authorities-charge-nordea-bank-with-money-laundering-violations/