Don’t try money laundering here – POLITICO

FRANKFURT — If Russian oligarchs try to launder their money to circumvent sanctions, they won’t have any luck in Estonia, according to the country’s central bank chief.

Both Estonia’s banks and authorities have pulled out all stops to weed out illicit money after the country’s reputation was tainted by scandal, Madis Müller told POLITICO.

“I think everyone now is just extra careful in managing the anti-money laundering risks,” Müller said, citing the “bad publicity” associated with its banking practices.

Estonia had long struggled on the money laundering front, but it was especially damaged by the Danske Bank affair, the largest such scandal ever in Europe. From 2007 to 2016, Denmark’s biggest bank failed to spot €200 billion in illicit funds — much of which stemmed from Russia — funneled through its branch in Estonia. 

The scandal is still reverberating today, Müller said.

“Resources to deal with [anti-money laundering] risks have been substantially beefed up at commercial banks, the [financial supervisor] and the Financial Intelligence Unit,” he said, adding that this effort extends to cooperation with the Nordic supervisor authorities, which aren’t part of the Single Supervisory Mechanism (SSM.)

“One can safely say that the problems with money laundering in the Estonian banking sector are history now,” he added.

At this point, Müller is more concerned about Russians turning to the global market for crypto assets, as a way to both launder money and avoid sanctions.

“It’s important that not just we in Estonia — but in general in Europe and globally — can control the points of interaction between digital assets and the traditional financial system,” he said. “That [way] no one would be able to convert crypto assets to official currency without properly identifying themselves and also without being able to prove the source of those assets.”

Similar comments came from European Central Bank President Christine Lagarde on Tuesday, when she said she was “most concerned” about what she sees as the high volume of rubles being converted into crypto assets ever since the West hit Russia with a barrage of financial sanctions.

Others are more sanguine. EU and U.S. officials have questioned the scope of the risk and don’t see crypto assets as major way around sanctions, in part because they can’t easily mask the massive financial flows that circumventing sanctions would entail.

About Wanda Dufresne

Check Also

People news: Norway adds to SWF’s Council on Ethics | News

GPFG/Council on Ethics – Vigdis Vandvik has been appointed as a new member of the …