Brussels warns Denmark and Estonia to crack down on dirty money or face court  

The Danske Bank scandal has piled pressure onto Europe to crackdown on money laundering offences 
The Danske Bank scandal has piled pressure onto Europe to crackdown on money laundering offences Credit: Freya Ingrid Morales/Bloomberg

Brussels has warned Denmark and Estonia that they're at risk of a court battle if they don't crack down on dirty money following Danske Bank's €200bn (£180bn) money laundering scandal.

The European Commission said on Thursday it needs to close any "weak point in the EU that criminals could exploit", adding that recent banking scandals proves member states should "treat this as a matter of urgency". 

The Commission has sent Estonia and Denmark so-called letters of formal notice after claiming the countries have not fully applied EU anti-money laundering rules. If it remains unsatisfied it could take court action, and has already referred Luxembourg to the Court of Justice for flouting the same directives.

In a separate announcement the Commission also said that Malta must change the way its anti-money laundering regulator operates following an investigation by Europe's banking watchdog. The demand came days after Malta’s Pilatus Bank had its license removed following accusations of corrupt payments. 

Malta’s financial watchdog has been under pressure after being accused of “general and systematic shortcomings” in how it applies money-laundering rules. Earlier this year, a leading MEP told The Sunday Telegraph that he would launch a potentially damaging publicity campaign against HSBC if it did not close its small business there.    

European authorities have been accused of being asleep at the wheel when it comes to tracking dirty money following a string of recent scandals.

The biggest scandal to come to light has been at Denmark's largest lender Danske Bank after authorities found that billions of pounds worth of suspicious transactions had washed through its Estonia arm. Customers at the branch allegedly included a Russian spy agency and members of Putin’s family. 

Following the scandal, Brussels ordered Europe's banking regulator to investigate potential legal breaches in Latvia, Denmark and Estonia.

Kremlin critic Bill Browder told The Sunday Telegraph last month that the UK was even softer on money laundering offences than the rest of Europe and had a "laughable" approach to financial crime. 

"The amount of dirty money coming through here compared to the amount of successful prosecutions is a clear message to bad guys around the world that you can get away with your crimes here in the UK," he said. 

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