Danish Banks face risks in South Africa

Danish banks, including Danske Bank and Nordea, have partnerships with South African banks involved in serious crimes like money laundering, reports Berlingske with Danwatch. These South African banks act as correspondent banks, facilitating cross-border transfers without intermediaries, which is crucial for international investments. However, the Danish banks are susceptible to becoming part of a crime chain due to the South African banking sector’s crime issues and the fact that the Danish banks do not know their customers directly. Professor Tom Kirchmaier from Copenhagen Business School highlights the tangible risks of money laundering and terror financing through correspondent banking. Previous engagements in South Africa have resulted in fines for insufficient controls, prompting increased scrutiny from regulatory bodies. Despite the acknowledged risks, Danish banks are monitoring their correspondent banking relationships but declined to provide interviews.