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USA imposes sanctions against ABLV Bank for money laundering schemes

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United States Finance Ministry’s Financial Crimes Enforcement Network (FinCEN) has established sanctions against Latvian ABLV Bank for money laundering schemes that have assisted with North Korea’s nuclear arms programme and illegal activities in Azerbaijan, Russia and Ukraine.

«ABLV has institutionalized money laundering as a pillar of the bank’s business practices,» as announced by finance minister’s deputy for terrorism and financial intelligence affairs Sigal Mandelker. «ABLV has facilitated transactions for corrupt politically exposed persons and has funneled billions of dollars in public corruption and asset stripping proceeds through shell company accounts.»

As noted by US authorities, ABLV failed to mitigate the risk stemming from these accounts, which involved large-scale illicit activity connected to Azerbaijan, Russia, and Ukraine. Illegal financial activities included transactions to sides associated with businesses associated with North Korea’s procurement or exports of ballistic missiles.

The ministry has financial institutions making special measures against the bank. Those measures include reporting certain transactions and restricting bank accounts.

Latvian bank supervisory institution – Finance and Capital Market Commission – has confirmed that it is aware of the announcement from the US Finance Ministry.

FCMC says that ABLV Bank continues performing its activities and is responsible for management of future solutions and continued cooperation with FinCEN. The bank has the right to express its opinion in regards to US authority’s decision within 60 days.

FCMC is currently going through documents associated with FinCEN’s measures. The organization also works with European Central Bank, which directly supervises ABLV Bank.

According to the commission, ABLV Bank has to continue its work and communication with clients to provide them with the necessary information and services. Clients, on the other hand, have to turn to the bank in order to receive additional information.

BNN/LETA

The announcement released by ABLV Bank mentions that FinCEN’s report about ABLV Bank contains false information, and that the report does not take into account the bank’s efforts to combat money laundering activities and terrorism funding in recent years.

ABLV Bank emphasizes that the report is a recommendation from the department, and that objections can be submitted within 60 days. The bank considers ways of convincing FinCEN to review its proposals. Representatives say the bank will do all it can to overturn the claims against it.

«We are closely working with the regulator to provide all the necessary information in a public manner,» as mentioned in ABLV Bank’s announcement.

The bank adds that it consequently follows international, including Latvian and European, laws and requirements. «The last couple of years, ABLV Bank has put a lot of effort into improving its internal control systems, including measures to prevent money laundering and terrorism funding risks,» as noted by the bank’s representatives.

Over the past two years the bank has performed several independent inspections, including ones in cooperation with US Navigant Consulting and K2 Intelligence. According to the report, recommendations from both consultancy firms have been completed.

The bank closely works with US strategic consultant Financial Integrity Network in measures to oppose money laundering and terrorism prevention.

Asset-wise ABLV Bank is the second largest bank in Latvia. The bank’s largest shareholders – Oleg Fils, Ernests Bernis and Nika Berne – own 87.03% of the bank’s capital. The bank’s bonds are quoted by Nasdaq Riga debt securities list.

ABLV Bank is under direct supervision from European Central Bank. 
15-02-2018
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