Estonia, EU – Baltic States, Financial Services

"Deutsche Bank's policy regarding Estonia and Latvia does not differ," a member of Versobank, Margus Normak, told on Monday evening. According to Normak, even if one big provider disappears, Versobank will continue offering dollar payments through other correspondent banks.

After Deutsche Bank decided not to offer the service anymore, making dollar payments has become more uncomfortable because there is now no very large contra agent that is able to deliver payments everywhere, Normak said. "Price changes will come later," he added.

At the same time Versobank is able to continue making dollar payments. "One can never rely on only one service provider and we have never done that. The only difference is what are the alternative channels. Deutsche Bank is very big, but it is not the only one," Normak said.

Head of the Financial Supervision Authority Kilvar Kessler told that the financial watchdog is aware what is happening in banks but without the banks' permission he cannot comment on the subject. "I'm forbidden by law to share information," he said. At the same time he said that banks always have alternative plans for dealing with different risks and banks usually have several providers of correspondent services.

According to risk manager of Eesti Meedia, Erki Haamer, who previously worked as risk manager of Baltic banking at the Finnish OP bank, told hat Deutsche Bank leaving the market should not have a big impact on bigger banks because they can always use their parent banks as correspondents and their contra correspondents.

The state-owned energy company Eesti Energia has not noticed that something has changed or become worse, spokesman Kaarel Kuusk said.

An international group of investigative journalists at the end of March published their findings on how banks laundered 20.8 bln U.S. dollars of Russian money of allegedly illicit origin, of this nearly 1.6 bln dollars through Estonia. A document leaked to the Organized Crime and Corruption Reporting Project (OCCRP) team lists tens of thousands of companies and reveals how Estonian accounts of little-known offshore companies were used to move sums that equal a sixth of country's state budget. The lion's share, 1.18 bln U.S. dollars, of the funds moved through Estonia were transferred via accounts at the Estonian branch of Danske bank.

Danske Bank at the beginning of 2015 informed the public of its decision to restructure its commercial activities in the Baltic states and to focus on servicing corporate and private banking clients. It said that starting from June 1 that year, Danske Bank will only enter into new credit agreements with companies and private banking clients.

Making U.S. dollar payments in Estonia and Latvia may become extremely difficult if Deutsche Bank should stop handling dollar settlements here, Aivar Paul, head of prevention of money laundering at LHV Pank, said then. "It will definitely not happen at the same price, it will definitely not happen as quickly, and I'm not ruling out that it will not be possible to conduct all transactions then," he added.

Deutsche Bank last year posted EUR 1.4 bln in loss, and this has been the second consecutive year the bank sustained loss. Recently also large fines had been slapped on the bank, for example, in January New York's and British authorities imposed a fine of 630 mln dollars on the bank for inability to prevent money laundering in Russia.