The Estonian Financial Supervision Authority has ordered Danske Bank, which is the subject of a money-laundering investigation by Estonian prosecutor-general Lavly Perling (pictured), to cease its banking operations in Estonia.

In July Perling told her country's parliament of her investigation which came about after investor-activist Bill Browder, the CEO of Hermitage Capital, sent a complaint about the bank to the Danish public prosecutor and another about 26 of its employees to Perling. The investigators are trying to trace the €200 billion in potentially illicit funds that went through Danske Estonia between 2007 and 2015.

Danske Bank has been thinking of cutting down its business in Estonia (which now has to close before the end of the year), Latvia, Lithuania and Russia for some time and is now going to do so, although its "shared services centre" in Lithuania, which undertakes a number of administrative functions on its behalf, will continue.

Jesper Nielsen, the bank's temporary chief executive who took over when Thomas Borgen fell on his sword last September, has promised to take the interests of customers and employees "into account in the best possible way."

In 2015, Danske Bank signed an agreement to sell its personal customer business in Lithuania and Latvia to Swedbank. It also decided last year that in the Baltic countries it would serve only subsidiaries of its Nordic customers and globally active companies that were involved heavily in Scandinavia. It transferred all other banking activities to its 'non-core unit' to be wound up or disgorged.

A spokeswoman for the prosecutor's office told Compliance Matters that the regulator's decision of was not related directly to the investigation, but added: "all the information that FSA or the FIU (Financial Intelligence Unit) gets is shared with the prosecutor’s office." This suggests that Estonia lacks the safeguards of legal professional privilege that protect some information gleaned by regulators in the UK from going to the prosecutors.

The investigation continues.