Estonian Regulator: Banks Still Serving Unacceptable Clients

Regulators in Estonia have said there is more work to be done at cleaning up the country's financial services industry.

Speaking at a conference on Wednesday, Andre Nomm, a board member of Estonia's Financial Supervisory Authority (FSA), said that there are still banking clients that shouldn't be active in the country.

"Despite the implementation of know-your-customer measures there are clients who are not acceptable for the Estonian financial system,” said Nomm.

Estonia has come under the financial media's spotlight in the past 12 months after a massive instance of Money Laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Read this Term was uncovered.

This came last year after a Whistleblower Whistleblower A whistleblower is an individual who manages to provide information or activity within a private or public organization that is deemed illegal, unethical, or not correct. In many countries, including the United States, whistleblowers are protected by law and in some cases can even recoup rewards if their information leads to successful prosecution.In the context of the financial services industry, whistleblowers play a large role in oversight, helping unmask several episodes of illicit behavior A whistleblower is an individual who manages to provide information or activity within a private or public organization that is deemed illegal, unethical, or not correct. In many countries, including the United States, whistleblowers are protected by law and in some cases can even recoup rewards if their information leads to successful prosecution.In the context of the financial services industry, whistleblowers play a large role in oversight, helping unmask several episodes of illicit behavior Read this Term, and subsequent investigation, revealed that a Tallinn-based subsidiary of Danske Bank had laundered approximately $230 billion.

That was followed, two months ago, by an investigation into Swedbank.

Estonia - no place for dodgy banking

A report by broadcaster SVT found that the Swedish firm had helped to facilitate about $22.5 billion in suspicious transactions, per year, from 2010 to 2016.

Since that report aired, Swedbank's chief executive officer, Birgitte Bonnesen, has been fired and, earlier this month, the bank's chairman - Lars Idermark - resigned.

The firm is also now the subject of a joint investigation between Swedish and Baltic regulators.

Even prior to the Swedbank allegations, the Estonia FSA had already started a review of the 16 banks operating in the east European nation.

The regulator says that banks working in the country will now be focusing their efforts on servicing private clients and local customers.

Despite that, Nomm said on Thursday that some firms have been put on more detailed monitoring plans. Swedbank is one of them but the regulator refused to name any of the other firms being subjected to those measures.

“We are giving a single and consistent message to the managers of the banks that Estonia is no place for dodgy banking,” said Nomm.