May 25, 2018 / 11:19 AM / 6 months ago

Police says $13 billion laundered through Estonia

TALLINN/COPENHAGEN (Reuters) - More than $13 billion (9.7 billion pounds) were laundered through banks in the small Baltic state of Estonia from 2012-2016, with at least 7.3 billion euros in assets through non-resident bank accounts, police said on Friday.

The European Union member country has been rocked by revelations of money laundering from Russia, Moldova and Azerbaijan via non-resident bank accounts that have forced lenders in Estonia and neighbouring Latvia to shut down.

Estonia’s police Financial Intelligence Unit (FIU) said that besides more than $6 billion laundered via Estonian banks in schemes discovered by national financial inspection agencies, a further unreported 7.3 billion euros was channelled via Estonian banks through the sale of Russian stocks and bonds.

The report said that Russian authorities had acted to curb transfers of funds abroad, Russian assets instead were transferred to non-resident accounts in Estonian banks for them to be liquidated through the Estonian financial system.

“In 2012, more than 7.3 billion euros in securities from Russia were processed through the Estonian financial system. The proceeds were transferred to dozens of jurisdictions and thousands of companies for various goods and services,” the FIU said in its annual report.

In that year, Estonia’s economy itself was worth just 17.9 billion euros.

Estonian police also warned that more attempts to launder funds could be expected with further Russian bank closures likely this year.

Denmark’s financial watchdog said this month it had found “serious weaknesses” in Danske Bank’s (DANSKE.CO) governance after investigating management and senior employees as part of an anti-money-laundering inquiry into Danske’s Estonian branch.

The bank could face further legal steps in Denmark, its justice minister and business minister made clear at a session of the Danish parliament’s business committee on Friday.

Denmark’s State Prosecutor for Serious Economic and International Crime is now looking into the case, Justice Minister Soren Pape Poulsen said.

But the prosecutor’s office will await the Danish FSA’s conclusions, which are still open for appeals, and the outcome of an investigation by Estonia’s FSA before it announces any next step, Poulsen said.

“There is a case now in Estonia. We’ve offered our assistance, but we would need help from the Estonian authorities regardless of what our next steps would be,” Poulsen said.

A Danske Bank spokesman declined to comment.

Latvian authorities warned on Thursday that an increased flow of questionable and illegally sourced money into other EU states was expected as Baltic authorities crack down on non-resident accounts.

Reporting by David Mardiste in Tallinn and Teis Jensen in Copenhagen; Editing by Johan Ahlander and Mark Heinrich

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