It is one of the world’s biggest money laundering scandals, even if it happened in a small EU country. And it had no consequences for the supervisors: From 2007 to 2015, the Estonian branch of Danske Bank, the most important Danish bank, processed 200 billion euros in payments without adequate controls. Many of these transfers came from suspicious sources in Russia and other Eastern European countries, an investigation later revealed. The control of the institute was the responsibility of the Estonian and Danish financial regulators. The European Banking Authority (EBA) in Paris, an EU body, opened a procedure in 2019 to check whether the two national authorities had disregarded EU requirements. Two months later, however, this investigation was carried out set, after a vote in the EBA Board of Directors. Experts had recommended to the authority that the administrative board should find a breach of EU law.
Interestingly enough, representatives of the national supervisory authorities sit in this top decision-making body, for Germany, for example, Raimund Röseler, who is in charge of banking control at the Federal Financial Supervisory Authority (Bafin) in Frankfurt. The termination of the procedure was sharply criticized by MEPs, but the EBA refused to say who exactly had voted for and against this step for a long time. In the meantime, however, the Parisians have it Result published – and it’s explosive.
Only France voted to find a violation of the law. Twelve representatives abstained, including the German, 13 voted against the diagnosis of a violation of the law – including the Danish and Estonian representatives. So those affected voted and were unsurprisingly in favor of an acquittal.
The CSU MEP Markus Ferber says the supervisors apparently acted “according to the principle: one crow does not poke another eye out”. The economic policy spokesman for the Christian Democratic EPP parliamentary group called the fact that Germany also abstained as “shocking”. If the envoy from SPD finance minister Olaf Scholz “can only bring himself to abstain in one of the largest money laundering cases in EU history, that is a sign of poverty,” complains Ferber.
Now it is supposed to be directed by an EU supervision
After all, the supervision of the fight against money laundering in Europe is about to change: in the summer, the EU Commission proposed creating a separate control authority at European level because the Commission disapproves of the differences in quality between national supervisors. This new facility, which could be operational in 2023, will directly control some large and risky financial groups – including on-site inspections and the right to impose fines. The national supervisors should remain responsible for the other financial institutions. The EU authority will coordinate and monitor their work. If it turns out that a state supervisor at a bank is not looking well enough, the EU institution can take the case directly. If this possibility had already existed in 2007, the EU might have saved itself some trouble.