Baltics AML: Where there’s no will, there won’t be a way
No one is surprised by the money-laundering revelations from the Baltics.
European authorities are shocked – shocked! – to discover that money-laundering has been going on in the Baltic states.
Which, of course, means they are not. The sheer scale of Danske Bank’s reported infringements in Estonia may have come as a surprise – the lender has admitted that most of the €200 billion of foreign flows that passed through its Tallinn operation between 2007 and 2015 could be classed as suspicious.
The fact that some banks in Latvia and Estonia were acting as conduits for dirty money, however, has been an open secret for more than two decades. Bankers who worked in those countries say it was well-known which institutions were open to money-laundering, or indeed set up for it.
Yet no action was taken. Even after compelling evidence emerged of the involvement of Latvian banks in the Magnitsky case, the Moldovan bank fraud and the Russian Laundromat, European bodies stayed on the sidelines.
The money-laundering scandals that have rocked the Latvian banking sector and Danske this year, and made international headlines, were brought to light by US authorities and investigative journalists, not EU regulators or enforcement agencies.