DIRTY MONEY
The 9/11 attacks crystallised concerns that laundered funds could be used to finance terrorismrelated activities was one of the largest ever handed out in the Netherlands, it was of little consequence to an institution of ING’s size, which posted a net result of €776m in Q3 2018 even after the fine was paid. Rather than being the deterrent it was intended to be, the fine simply knocked a zero or two off the bank’s sizeable yearly profit and left little lasting fiscal damage. ING’s case sparked investigations into the institutional inaction that had rumbled on unchecked for the past decade. In July 2018, Estonia’s prosecutor general opened a criminal investigation against Danish national lender Danske Bank following allegations of a mass-scale money laundering operation. Over €200bn in suspicious transactions had report-
Howard Wilkinson, the whistleblower who first brought the Danske Bank scandal to light
edly flowed through a tiny Estonian branch of the bank between 2007 and 2015, predominantly through the accounts of British and Russian entities. The scandal was brought to light by British whistleblower Howard Wilkinson, who headed up the bank’s Baltics trading unit during that eight-year period. The case has since swelled to massive proportions, engulfing Deutsche Bank, which has been named as a secondary lender. According to sources quoted by the Financial Times, the German bank helped to process some €181bn of corrupt funds for Danske across around one million transactions. In December 2018, the Organised Crime and Corruption Reporting Project named Danske Bank as the 2019 Cor-
FIG 2: THE REPORTED INCREASE IN THE RATE OF ECONOMIC CRIME BY REGION 57% 33%
EASTERN EUROPE
NORTH AMERICA WESTERN EUROPE
25%
¤675m ¤100m
53% 35% 37
54
%
40%
62%
PAID IN FINES
47%
28%
LATIN AMERICA MIDDLE EAST
46%
30%
ASIA-PACIFIC
A costly affair The question on everyone’s lips during the entire sordid affair was this: how did money laundering on this scale go undetected? Both Estonia and the Netherlands are part of Europe’s banking union, which is subject to no fewer than 19 different AML systems and regulations, including the AMLD. Yet, the ING and Danske Bank cases continued unpoliced for years. It’s not just a problem in »
ING MONEY LAUNDERING SCANDAL:
■ 2016 ■ 2018
AFRICA
rupt Actor of the Year, while Estonian authorities arrested at least 10 people in connection with the case. UK and US authorities have now launched their own investigations; the scandal is expected to persist for years to come.
45%
Source: PwC Global Economic Crime and Fraud Survey 2018 Note: Respondents were asked, “Has your organisation experienced any fraud and/or economic crime within the last 24 months?”
%
ADDITIONAL PENALTY TO COMPENSATE FOR ANY PROFIT RESULTING FROM THE CRIME
¤776m
NET RESULT IN Q3 2018 (INCLUDING PAYMENT OF THE FINE) EUROPEANCEO
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