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IN ANTI-MONEY LAUNDERING, COMPLIANCE REALLY DOES MATTERandrew friedmanFollow1 min read·Nov 16, 2018 --
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Bloomberg ran a story today about large international banks that may be under investigation for their relationship with an obscure Estonian branch of Danske Bank, the largest bank in
Denmark. Danske is by no means an international powerhouse, but a branch in Talinn apparently pumped almost $250 billion into international banks Deutsche Bank, JP Morgan Chase, and Bank of
American between 2007 and 2015. Those funds are suspected to be the proceeds of illegal activity in Russia. The amount is in the same ballpark as the former Soviet republic’s entire economic
output during that time period.
The large multinationals stopped doing business with Danske between 2013 and 2015. Danske has publicly conceded its internal controls may have failed in Estonia.
Big AML problems have emerged from small branches before. In 2012, HSBC paid fines of nearly $2 billion after its compliance function failed to flag suspicious transactions at HSBC’s Mexico
branch. Mexican and Columbian drug cartels had laundered over $850 million through HSBC Mexico — including huge deposits from people with no apparent income.
Takeaway? Strong compliance isn’t optional.