Analyse af interne procedurer, kontroller og beslutningstagninger i Danske Banks

Abstract

Analysis of internal procedures, controls and decision-making in Danske Bank’s money laundering case Yasin Kayhan, Copenhagen Business School Muhamed Batuhan Yakut, Copenhagen Business School Danske Banks possible money laundering case in Estonia could become one of the world’s biggest money laundering cases. Since acquiring the Finnish bank Sampo Bank in 2007, the Estonian branch that was included in the purchase seems to have caused more trouble for Danske Bank than good. The decision-making and the timeline behind the Estonian Branch, however, indicates that there were a lot of gaps between internal controls and procedures when comparing to the international standards and Danish national law. Although receiving multiple warnings from both the Danish and the Estonian FSA regarding the non-resident clients at the Estonian branch, Danske Bank seemed to have a false sense of security regarding their non-resident portfolio in Estonia, therefore seeming confident that the portfolio was covered by proper risk management measures. This, however, changed after an employee at the Estonian branch filed a whistleblower report, which made Danske Bank Group dig deep. The results of the investigation proved, that some internal procedures were not followed. This had resulted in a client base infested with suspicious activity and Danske Bank not having the required information about their client base to comply with international money laundering standards. When the implementation of money-laundering measurements at Danske’s Estonian Branch is put through Burns and Scapens theory of Institutional Framework, there are signs of constant improvements and setbacks throughout the years and never really came through Encoding phase, which resulted in the shutdown of the non-resident portfolio of the Estonian Branch in 2016. Furthermore, the whistleblower and media coverage resulted in a massive “scandal” of Danske, as the criticism and estimated money laundered skyrocketed without a court case even concluding the actual money laundered through the Estonian Branch. The journalism and media coverage has without doubt played a huge role in shifting the public opinion regarding Danske’s case in Estonia, which has yet to be concluded. Because of this, there is also a chance that many figures and estimates given in articles might deviate from factual numbers and therefore there is a risk of Danske being publicly punished for an unjust reason. The purpose of this thesis was to analyze and understand Danske Banks internal procedures and controls, three lines of defence and decision-making and understand how all these controls might have been defective and allowed Danske Bank to become potentially one of the world’s biggest money laundering scandals in modern history