Danske Bank, behind schedule on anti-money-laundering plan, receives orders

Danske Bank A/S has already fallen behind in reaching the objectives set out in an anti-money-laundering plan created in May 2020, according to the Danish financial supervisor, which has now ordered the bank to let experts monitor the plan's implementation over the next six months.

In light of a €200 billion money-laundering scandal at its Estonian branch, Danske Bank was asked by the regulator last year to create a detailed plan for a remediation process, which the bank submitted in May 2020, the so-called Financial Crime Plan.

However, even if Danske has "made significant progress" in the plan's implementation, the bank has "already fallen behind the objectives set out in the plan with regard to a substantial part of the plan's work streams," the regulator said in a letter to Danske's board dated Feb. 19.

As a result, it ordered Danske to "let one or more experts follow the bank for a period of six months" to check that the implementation takes place as set out in the plan and is implemented at the bank's foreign units. The experts should also assess whether the measures taken by the bank are sufficient.

Philippe Vollot, Danske's chief compliance officer, said the bank "fully supports" the decision by the regulator, given the "complexity and scale" of its financial crime plan, which is now at a "critical stage" of its execution.

"We remain confident that we will reach our overall targets and in the comprehensive actions set out in our plan, which will result in the continued improvements of our financial crime defenses," he said.

The letter from the regulator also revealed other shortcomings in Danske's anti-money laundering efforts over the last few years. It said that Danske has been undertaking a "comprehensive and extremely resource-intensive remediation process in the AML area since 2017," yet until the beginning of 2019, this process was not expediently organized and thus "ineffective."

Furthermore, until May 2020, Danske did not have an overall detailed plan for the remediation process that covered all its units and subsidiaries, including branches outside Denmark, and which described both planning and implementation in detail, the regulator said.

The costs of the experts are payable by the bank, it said.