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Danske Bank Faces U.S. Criminal Inquiry Over Suspicious Estonian Accounts

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Danske Bank Faces U.S. Criminal Inquiry Over Suspicious Estonian Accounts

Danske Bank is being investigated by the U.S. Department of Justice over a 200 billion euro ($230 billion) money laundering scandal involving its Estonian branch, confirming long-held investor fears.

Denmark’s largest bank said in a statement on Thursday that it had “received requests for information from the U.S. Department of Justice (DOJ) in connection with a criminal investigation relating to the bank’s Estonian branch”.

The bank, which this week appointed Jesper Nielsen as interim chief executive to handle the growing crisis after the resignation last month of Thomas Borgen, said it was cooperating with the U.S. authorities.

Shares in Danske Bank fell by three percent to 160 Danish crowns, their lowest level since January 2015 and a 33 percent decline so far this year, as investors digested the latest developments at the bank.

Shareholders have fretted for months over the possibility of U.S. authorities investigating whether Danske Bank broke U.S. rules in allowing payments through its Estonian operation because of the potential for significant penalties.

France’s BNP Paribas reached a record $8.9 billion settlement with U.S. authorities in 2015 to resolve claims that it violated sanctions against Sudan, Cuba and Iran.

Many of the non-resident accounts at Denmark’s Estonia branch were held by entities or individuals in Russia, which is the subject of sanctions by the United States.

Banks doing business in Estonia handled more than $1 trillion in cross-border flows between 2008 and 2017, the country’s central bank said on Wednesday.

Sweden’s Swedbank said on Thursday there were “no ongoing investigations” into its anti-money laundering practices by any of its regulators.

WIDENING NET

In a sign of the impact criminal and regulatory investigations in Estonia, Denmark and the Britain are having on the lender, Danske Bank said it would end its share buyback program after reassessing its capital targets.

It had initially planned to buy shares back worth 10 billion Danish crowns ($1.5 billion) under the program, which should have run until Feb 1 next year. It had repurchased shares worth 6.8 billion under the program as of the end of last week.

This followed an assessment by Denmark’s Financial Services Authority which said Danske Bank’s compliance and reputational risks were now higher than previously thought in May.

The FSA did not mention the U.S. authorities in its 12 page follow-up report published via Danske Bank on Thursday.

The FSA said in May that the bank’s Pillar II capital requirements should increase by 5 billion Danish crowns but it has now ordered Danske to reassess its solvency need “with a view to increase the add-on to an absolute minimum of 10 billion crowns”.

The bank has therefore raised its CET1 capital ratio target to around 16 percent from a target of 14-15 percent and its total capital ratio to be above 20 percent from an earlier target of above 19 percent.

By end of the second quarter the bank’s CET1 ratio stood at 15.9 percent and its total capital ratio stood at 21.6 percent.

Last month the bank said in an internal report commissioned by Borgen that payments totaling 200 billion euros, many of which it described as “suspicious”, had been moved through its tiny Estonian branch between 2007 and 2015.

The findings of the report led to Borgen taking “ultimate responsibility” and stepping down, although he says he was cleared from a legal point of view, and prompted regulators across the European Union to question their oversight.

Politicians in Europe are calling for stricter measures to prevent money laundering in the bloc’s banks, after Dutch financial group ING was fined 775 million euros last month after admitting criminals had been able to launder cash through its accounts.

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Time Magazine Names Jamal Khashoggi, Other Journalists As “Person Of The Year”

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Time Magazine Names Jamal Khashoggi, Other Journalists As "Person Of The Year"

This year’s time magazine “Person Of The Year” has been bestowed on a group of journalists that includes murdered Saudi writer, Jamal Khashoggi and two Reuters reporters imprisoned by Myanmar’s government.  The magazine says it named the group of journalists as “person of the year” because the idea of truth as critical to democracy is under assault.

Also honored is the founder of a Philippines news website that has been vocal in criticizing that country’s authoritarian government. A Maryland, USA, newspaper is also among the honored.

This is the first time in its ninety-five year history that time magazine has honored people in its own profession.

The annual distinction is intended to recognize the person, group or idea that had the greatest influence on world events that year. It has been given to a wide range of influencers, from u.s. Civil rights activist Martin Luther King Jr. And Queen Elizabeth to Adolf Hitler, the leader of Nazi Germany, who was honored before the start of world war two.

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Syrian Government Using Anti-terrorism Law To Seize Properties From Dissidents

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Syrian Government Using Anti-terrorism Law To Seize Properties From Dissidents

Rights groups and some of the affected Syrian people say the government has been using a little-known anti-terrorism law to seize property from dissidents and their families as it takes back control of areas that were held by rebel groups.

Now that Syria’s conflict has stabilized, and president Bashar al-Assad again controls the biggest cities, it is left to be seen how he will handle the areas where the 2011 uprising against him flared.

International attention has focused on policies, such as legislation known as law 10, that could eventually enable the government to dispossess people in the opposition strongholds worst damaged in the war.

But human rights groups say, while law 10 has not yet been put into effect, the separate anti-terrorism law has already been used to seize property, including from people who had no hand in violence.

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Theresa May Faces Confidence Vote

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Theresa May Faces Confidence Vote

British prime minister, Theresa May faces a confidence vote in her leadership by MPs in her own conservative party, after chaos began to roil her European union exit deal.

So much now plagues the deal that has opened up the prospect of a messy no-deal Brexit or a referendum that could reverse Brexit.  Britain is due to exit on March the twenty-ninth next year.

Graham Brady, the chairman of the party’s so-called 1922 committee, said the threshold of 15 percent of the parliamentary conservative party seeking a confidence vote had been reached.  A vote will be taken at the house of Commons later this evening.

May could lose her position as prime minister if a hundred fifty-eight of her three hundred fifteen MPs vote against her, but a mutiny could also help sustain her through the crisis.

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