Nordea fined 155 million Danish kroner in money laundering case, Digi Mart USA News (Copenhagen, Denmark): Nordic bank Nordea has been fined 155 million Danish kroner in a sweeping case over alleged violations of the Danish Money Laundering Act involving more than 26 billion kroner. The Copenhagen City Court published a summary of the ruling on its website.
Prosecutors had sought a fine of 6.6 billion kroner, equal to 25 percent of the more than 26 billion kroner for which Nordea was charged with breaching the Money Laundering Act. Money laundering is the process of concealing that money comes from criminal activity, such as drug sales, fraud or theft, so that it can be used without arousing suspicion.
The case against Nordea centered on allegations that the bank’s money laundering controls were so deficient that they amounted to a violation of the law. The court was not asked to determine whether billions of kroner had actually been laundered through the bank’s International Branch at Vesterport in Copenhagen.
The court acquitted the bank of most of the charges, according to the ruling summary.
The ruling is the first time a Danish court has ruled on whether a bank violated the Money Laundering Act. All previous money laundering cases ended with banks agreeing to pay a fine before the case went to trial.
Either party may appeal the ruling to the High Court.
The main issue involved 17,726 transactions totaling nearly 25 billion Danish kroner sent through the closed Nordea International Branch at Vesterport between 2012 and 2015. The companies behind these transactions were so-called “east customers,” primarily with Russians as ultimate owners.
However, the companies were not located in Russia; many were registered in tax havens. Prosecutors suspected money laundering given the large sums and complex corporate structures.
The court said the fine was calculated based on the nature, gravity and scope of the violations, including information on the size of the transactions and any savings the bank may have gained by failing to carry out required measures. The court also considered that case processing by police and prosecutors had been lengthy and that periods without investigative progress had not been adequately explained.
The court rejected one claim and fully acquitted Nordea on that charge, finding that prosecutors had not met the burden of proof that the bank violated the earlier version of the Money Laundering Act. Nordea was also accused of entering into and maintaining business relationships with 253 corporate clients engaged in money transfer or currency exchange services in Copenhagen, and of failing to adequately investigate those customers despite heightened money laundering risk.
The bank was acquitted on that point as well.
Nordea was found partly guilty on two other matters. The court found that the bank had acted grossly negligently and failed to meet its duty of attention and investigation in connection with suspicious transactions tied to the sale of 85 million euros to customers, including currency exchange businesses.
The bank was convicted on five of those customer relationships. The court also found that Nordea intentionally failed to continuously monitor suspicious transactions, stating that more than 200,000 transaction alerts were systematically archived over an extended period without any investigation.
Only a summary of the ruling has been published; the full judgment will be released at a later date. The court noted that if the ruling stands, Nordea would face a far smaller penalty than Danske Bank, which in December 2022 pleaded guilty to bank fraud and agreed a settlement with American, Estonian and Danish authorities over money laundering through its Estonian branch.
Danske Bank paid 2.06 billion dollars, equivalent to 15.3 billion Danish kroner, to Danish and American authorities. An internal investigation by a law firm in 2018 identified suspicious transactions totaling 1,500 billion kroner through that branch.
