It should come as no surprise that Russia is one of the largest exporters of illicit money, and has been so for decades. This is well known. There are many reasons for large financial outflows from Russia but one that remains constant are those that involve the proceeds of financial crimes, which are being laundered internationally. Twenty years ago it was the Bank of New York that was caught up in Russian Money Laundering and whilst there have been others in between its now Danske Bank’s Estonian branch that is being investigated by numerous agencies and will inevitably pay a hefty price for its lax controls.
A few observations though. Firstly whilst there has rightly been a strong negative reaction to the roll played by Danske Bank, calling this a Danske Bank scandal misses the point. It’s a Russian Money Laundering scandal first and foremost and Second if not via Danske it would have been somewhere else, so long as the underlying financial crime issues are addressed, maybe not on that scale and probably with other Banks but the proceeds of crime would still have been laundered. So whilst it’s natural to include Danske Bank in trying to find out what went wrong, the answers will not be found in Copenhagen or in Danske Bank.
What is more important is to ask where the moneys cane from that went into Danske, what types of criminal activities generated these funds and now that we have details about the flows of. Funds from Danske records we can ask when will monies be seized and the criminals involved arrested and prosecuted.
The investigative work will benefit from Russian Government support and genuine co operation. This should be a test for Russia as both a member of FATF and the Egmont Group its credentials on fighting financial crime can be enhanced or further tarnished. With the FATF Country evaluation of Russia starting in just a few months time, evaluators will be wise to size the risk and response from Russia to this and other money laundering matters.
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