Dr.Gerstenfeld’s article was first published by the Begin Sadat Centre For Strategic Studies and republished here with the author’s consent…
DANISH BDS-SUPPORTING BANK BEHIND LARGEST DIRTY MONEY LAUNDERING SCHEME IN EUROPE
Somewhat surprisingly Denmark provides an example of a huge morally corrupt anti-Israel BDS promoting body. That while it was far more probable for such an organization to come to the light in Norway or Sweden where there are many more anti-Israel inciters.
It has recently become known that Denmark’s largest banking group, Danske Bank has been involved for years in a huge dirty money laundering scandal. This criminal activity was conducted by its subsidiary in Estonia between 2007 and 2015. The amount of money transferred abroad and currently investigated is a staggering 234 billion dollars. The bank estimates that a significant proportion of these payments was suspicious.1
Fifteen thousand accounts were reviewed. Of these, 6,200 had the most risk factors. The customers involved were primarily Russians and other Eastern Europeans non-resident in Estonia.2 To carry out this scheme Danske Bank’s subsidiary needed the help of major foreign banking correspondents.
It has not yet been ascertained to what extent these foreign banks were aware of what was going on. Yet, JP Morgan terminated in 2013 its correspondent banking relationship with the Estonian bank due to doubts about its activities. It was replaced by Bank of America. Deutsche Bank also continued to make US dollar wire transfers on behalf of the Estonian Bank.3
In 2014, when Danske Bank had already received serious warnings about the unethical activities in its Estonian business it decided to add Bank Hapoalim to a list of companies in which it could not invest due to its corporate accountability rules. It published that the exclusion was based on “legal and ethical reasons.”4 Danske Bank stated that Bank Hapoalim was funding settlement activities and was “acting against the rules of international humanitarian law.” Danske Bank had also withdrawn its investments from the Israeli companies Africa Israel Investments Ltd, Elbit Systems, Aryt and Danya Cebus.5 6 7 8
The boycott of Bank Hapoalim was not without consequences for Danske Bank. Several states in the US ceased conducting business with the bank and/or sold their investments in it. These included Colorado and New Jersey.9 In 2016, Danske Bank reversed its decision concerning Bank Hapoalim.10
A year ago the British Guardian daily revealed that, based on leaked data, Azerbaijan’s leadership used the bank to fund a secret $2.9 billion scheme to pay prominent Europeans through a network of British companies. The paper claimed that between 2012 and 2014 more than 16,000 covert payments were transacted through the Danske Bank’s branch in Estonia. Part of this money appears to have been passed on to politicians and journalists within a lobbying operation framework.
The scheme is nicknamed ‘the Azerbaijan Laundromat.’11 Among those receiving payments were former members of the Council of Europe’s Parliamentary Assembly, as well as a Board Member of the European Bank for Reconstruction and Development (EBRD). It has not been proven that all recipients knew the source of the money. as it was disguised via intermediaries. What was disclosed then was already hugely shameful. In the framework of what is currently public knowledge of the laundering scandal, it is however minor.
Recently, Danske Bank’s CEO, Thomas F. Borgen tendered his resignation but said that he would stay on until a suitable successor would be found.12 Since then, Borgen has been ousted by the Board.13 A report on the scandal was prepared by a Danish law firm which had previously advised the bank. Due to this earlier relationship there were also criticisms of this choice.
The report outlines how incompetent and negligent Danske Bank’s management was. The document states inter alia that no adequate controls were put in place by the bank of its Estonian branch. Nor did it react to serious indications of wrongdoing over the years. There are also suspicions that some employees in Estonia assisted in the money laundering or colluded with clients.
Although the scandal has reached gigantic proportions, its total repercussions have not yet been fully exposed. Many more ramifications will take more time to investigate. The UK National Crime Agency announced that it has begun an inquiry into the use of UK companies by the Danske Bank group involved in money laundering activities. An organization, Corruption Watch requested that serious consideration should be given to withdrawing the bank’s UK license.14
The Danske Bank money laundering activities are probably the largest in European history. Danish Business Minister, Rasmus Jarlov said he expected Danish authorities to fine Danske Bank the equivalent of more than 600 million dollars. Analysts expect that the bank may also be fined billions of dollars by US and European regulators.15 There are already voices which urge the bank’s Board to assess whether management breached its fiduciary responsibilities and possibly could be held liable. If so they should be sued.16
Israel is subjected to a constant barrage of extreme hate propaganda and discrimination by morally corrupt individuals and organizations. If Israel had, as it should have an anti-propaganda agency, the Danske Bank scandal could be used as a prime example of ongoing fraudulent ethics. This case would be all the more useful as revelations from further investigations about the bank’s misbehavior will most likely result in much additional disclosures in the years to come.