The Danske bank whistle-blower, regulatory experts, and bank representatives testified on Wednesday at the special tax committee hearing on money laundering in the banking sector.

The hearing was scheduled to take a close look at two specific cases of important money laundering through EU banks - the Danish Danske Bank, mainly through its Estonian branch, and the Dutch ING bank - and draw lessons for the future. It was organised as part of the fact-finding work of the Special Committee on Financial Crimes, Tax Evasion and Tax Avoidance (TAX3).


Among the issues most discussed were:

  • ways to increase whistle-blower protection in Europe, currently lagging far behind that afforded in the US, and the need to regard such persons as the most powerful tool to fighting fraud;
  • a reform of the role of regulators and supervisors, away from being considered as authorities to protect and help home businesses;
  • closer cooperation between the member states’ financial intelligence units and the possible establishment of an EU FIU;
  • the essential clamp-down on shell companies;
  • the need to link remuneration in banks less with performance and more with risk mitigation;

Reactions from committee lead MEPs


In comments given after the hearing, the committee chair and the two co-rapporteurs said:


Petr Ježek (ALDE, CZ), committee chair

''Today's hearing confirmed that especially smaller Member States struggle to fight money laundering properly on their own. An EU authority should be charged with robust powers in the fight against money laundering and terrorism financing, including powers to investigate. That, together with reinforced and better organized and harmonized EU Member State financial intelligence units, would make the fight against money laundering much more efficient.”


Luděk Niedermayer (EPP, CZ), co-rapporteur

"The case of Danske Bank underlines that what seemed to be a robust EU ant-money laundering framework, does not work in reality. Transposition in many Member States is insufficient, enforcement weak and relevant authorities ineffective or even incompetent. We need an urgent improvement on the side of enforcement of EU anti-money laundering rules. Member States must cooperate better, robust standards are needed and, where appropriate, more centralisation including the possibility to transform the anti-money laundering directive into a regulation. There is no time to hesitate. Slow reaction only works for criminals, terrorists and corruption."


Jeppe Kofod (S&D, DK), co-rapporteur

“It is painfully obvious that non-disclosure agreements (NDAs) present a real and very harmful obstacle to would-be whistle-blowers in Europe. This serves only to protect criminals and wrongdoers whilst putting pressure on employees who seek to expose illicit activities, like Mr Wilkinson.


There is an urgent need for legislative action on whistle-blower protection, both at EU and Member State level, including a wholesale reform of how NDAs can and cannot be used. No one should fear reprisals when reporting criminal activities to authorities in Europe.”


Follow-up


A delegation from the committee will travel to Denmark and Estonia to continue investigating the Danske bank scandal in early February.


You can watch the hearing again here. All relevant documentation on the hearing can be found here.


Background on the committee


Following continued revelations over the last five years (Luxleaks, the Panama Papers, Football leaks and the Paradise papers), the European Parliament decided to establish a Special Committee on Financial Crimes, Tax Evasion and Tax Avoidance (TAX3), on 1 March 2018.


During its twelve-month mandate, the committee is examining and assessing whether further progress has been made in combatting financial crimes, tax evasion and tax avoidance. To do this, numerous hearings with experts and fact-finding missions are being organised regularly. The committee will conclude its work with a report containing its findings and recommendations. The co-rapporteurs are Luděk Niedermayer (EPP, CZ) and Jeppe Kofod (S&D, DK). The draft report containing the first findings is already available.