Both the Moldovan money laundering device published in Postimees this spring and the Azerbaijani instrument published in Äripäev on Monday that form the greater Laundromat scheme have shed light on the dark side of Estonian banking. While transfers were made to all Estonian banks, the Estonian branch of Danske Bank stood out.
Estonian banks were used to launder $1.6 billion from Moldova. Sums that moved through Estonia from Azerbaijan came to $2.9 billion. The money was transferred mainly in dollars and primarily to the accounts of UK companies in Estonian banks, with transfers growing exponentially year by year.
The Bank of Estonia keeps track of sums that move through the country. Sums transferred to British firms hovered around $3 billion on average in 2008-2010. A year later, that sum grew bigger than the Estonian state budget at $6.7 billion. By 2012, it was double the state budget at $13.9 billion, reaching $18.7 billion the following year.
A comparable spike can be seen in transfers to accounts of Russian, Latvian, Ukrainian, Danish, and Czech companies in Estonian banks. Except for the latter, all have been central participants in the Moldovan and Azerbaijani money laundering schemes.
However, colossal sums laundered in those two cases (total of $4.5 billion) cannot explain the several dozen billion dollars that flowed through Estonian banks during that period.
Critics could explain the central bank’s statistics with growing economic activity, more active foreign trade, and other rational arguments if the bank didn’t have more data to overturn it.
Transfers to Estonian banks from abroad suggest the spike only manifested in 2012-2014, only concerned US dollars and said countries.
Leaving aside Azerbaijan and Moldova, billions flowed into Estonia from banks in the UK, Latvia, Ukraine, and Russia in 2012-2014. In several cases, almost nothing moved back.
In the case of some countries, billions turned into tens of millions by 2015 and 2016. It is noteworthy that dollar transfers outnumber those in pounds and euros when it comes to the United Kingdom; as well as that sums do not differ to any notable degree in the case of the USA year in, year out, and the volume of dollar transfers falls considerably short of those in aforementioned countries. These irregularities characterize how such schemes work.
What follows is a generalized description. The Russian and Azerbaijani elite sends stolen money to accounts of UK shell companies in Estonia through banks in Azerbaijan, Ukraine, Moldova, and Latvia. From there, sums are immediately forwarded to pay off European politicians and purchase luxury items (including top soccer players), or sent back in cash.
Head of the Central Criminal Police’s money laundering bureau (RAB) Madis Reimand told Postimees that there have been other cases of major cash flow through Estonia this decade regarding which RAB has been suspicious in terms of the origin of the money and the aim of the transactions. “From what we know today, we do not have reason to tie them to the two schemes at hand in terms of criminal origin or purpose,” Reimand said.
He added that persons associated with dirty money look for opportunities in the financial system where the risks for obstruction and losing the money are smaller.
“An opportunity was spotted in the Estonian financial system during that period,” he said.
This means that people who wanted to hide their money in the EU at the time knew that the Estonian branch of Danske was the best place to do it. Something the latter has indirectly admitted.