We, 29.03.2023

Breakthrough in the Danske money laundering affair

Breakthrough in the Danske money laundering affair
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Photo: Liis Treimann

Yesterday (July 31) morning five minutes past nine the US financier Bill Browder received an e-mail from the Estonian Prosecutor General’s office, announcing that a criminal investigation has been started in accordance with the report of a crime submitted in mid-July. This was a true breakthrough in the struggle which Browder and international media have been waging for years.

Browder, in absentia sentenced to several years in prison by a Russian court, sent two letters to the Prosecutor General’s office last summer, asking to initiate a criminal process to investigate transactions in the Estonian branch of Danske Bank. He was certain that it has been used to launder money stolen from the Russian state. No investigation was undertaken at that time, since Prosecutor Eve Olesk cited the approaching expiry term of the alleged crime, complications of international cooperation and the impossibility to prove the premise of the offence.

Browder, however, did not give up. He struck back in early July, declaring openly in Postimees that the Estonian Prosecutor General’s office had all the information necessary to investigate the money laundering, but had done nothing with it. In mid-July it was followed by a new report of crime, in which Browder linked 26 employees of the Estonian branch of Danske Bank with a criminal association used to launder the money.

The Prosecutor General’s office replied to that report on July 31, stating that Prosecutor Marek Vahing has initiated a criminal investigation according to article concerning money laundering. Prosecutor General Lavly Perling, who addressed the emergency meeting of the Riigikogu Legal Affairs Committee concerning the Danske affair, said that the prosecutor’s office had not been passive before. “We have been working and developing international cooperation. We can report today the initiating of the procedure,” Perling said.

She pointed out that the investigators will face two major challenges. “First, international cooperation, and secondly, the time which has passed since the crime. We shall do our best and try to find answers to what happened,” Perling said.

But why did the Prosecutor’s Office start the investigation only after the affair blew up into an international scandal? “The first answer is that the time, the space and the context have changed,” Perling explained and added: “There were details indicating the existence of a sufficient body of evidence proving that a crime had been committed.”

Jaanus Karilaid (Center Party), chairman of the Riigikogu Legal Affairs Committee, which held its emergency meeting on July 31, welcomed the self-criticism of the Prosecutor’s Office. “The representative of the office [Perling] accepted responsibility in the sense that information had not moved well enough,” he said.

According to Karilaid, Kilvar Kessler, the head of the Financial Supervision Authority, also admitted that the authority has mot enough manpower for the investigation of money laundering cases. “Representative of the Financial Supervision Authority [Kessler] said that they have 80–90 employees, but only two or three are dealing with money laundering,” Karilaid said.

He added that the Committee will negotiate with parliament factions’ chairmen to decide by September 12 whether the approximately 13 billion dollar money laundering scheme via Estonia should be investigated by an ad hoc parliamentary committee or a working group within the Legal Affairs Committee.

The meeting also decided that the Committee will draft a bill of amendments to regulations governing large money transfers. “We have to take legally deterring measures to force money launderers give up their plans or find other countries to do business with,” explained Minister of Justice Urmas Reinsalu (Pro Patria).

He proposed several ideas. “For example, introducing a reversed obligation of proof, which means that in case of suspicion of money laundering, the owner of a bank account used to transfer large sums, will have to prove the origin of the money. If the owner cannot or would not do it, the money can be confiscated,” Reinsalu explained.

Bill Browder is happy over the Prosecutor Office’s decision

“I would like to underline that the Estonian branch of Danske Bank was a transit point of key importance in the laundering of Russian money to Europe. Today’s decision of the Estonian Prosecutor General’s office is a hugely important move in global investigation of money laundering,” Browder told Postimees on July 31.

He added that the next issue will be whether the Danish Prosecutor General’s office will react the same way and will also start a criminal procedure. “We submitted a similar compliant in Denmark a couple of weeks ago. The Estonian investigating institutions reacted sooner this time.”

Browder does not believe that the Prosecutor’s Office is hopelessly late in starting the investigation. “A large amount of the evidence already exists. Carrying out the investigation only requires determination, but that is what the Estonian investigators lacked so far,” Browder said.

He recalled his previous contact with the Estonian investigating institutions in 2013 and described the experience as strange. “Estonia officially started an investigation, but nothing was actually done. The new prosecutor finally terminated the inquiry.

Now the money laundering via the Danske Bank branch has blown up into a scandal concerning the whole society and the public has every right to ask questions. It seems that there is now also political will to achieve clarity in the matter,” Browder said.