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Saeima to consider option to form a council to supervise FCMC

Imants Parādnieks/flickr.com/Saeima.
Saeima’s Budget and Finance Committee may consider the idea on forming a supervisory council to perform monitoring of the Finance and Capital Market Commission and develop proposals for the financial sector, as confirmed by deputy chairman of the committee Imants Parādnieks.

The politician emphasizes that the budget committee will evaluate the situation in the financial sector and may decide to form a supervisory council.

Chairperson of Saeima’s National Security Committee Inese Lībiņa-Egnere says that it is necessary to reach an agreement on an action plan. Finance Ministry and the Budget and Finance Committee would be responsible for this plan. If need be, the National Security Committee may become involved in resolving this matter as well.

Finance Minister Dana Reizniece-Ozola announced last week that Latvia has received information from US partners that banks continue laundering money. The minister will meet with Marshall Billingsley, Deputy Secretary of State for the Treasury Department of the US Department of the Treasury this week to discuss future cooperation.

According to Reizniece-Ozola, Latvia and USA agreed that it is important to reduce risky business of servicing non-residents. Officials did not discuss any specific terms within which Latvia should resolve the matter of risky transactions. Still, USA made it clear there is no a lot of time.

Foreign Affairs Minister Edgars Rinkēvičs also concluded during talks that Latvian institutions have very little information on problems in the banking sector to stop talking and start acting.

The US embassy mentions that Billingsley told Latvian officials that the country’s banking sector is still subjected to risks, including ones associated with non-resident banking services. He emphasized that to ensure positive sustainable growth requires a strong and well-supervised financial sector. Because of that, USA is committed to continue working with Latvia to combat corruption and money laundering threats.

FinCEN announced in the middle of February that it plans to establish sanctions against ABLV Bank for money laundering activities that had assisted with North Korea’s nuclear arms programme, as well as illegal activities in Azerbaijan, Russia and Ukraine.

The report published by FinCEN details that until 2017 the management of ABLV Bank had been using bribery to influence officials in Latvia in an attempt to avoid legal action and threats to its high-risk operations. Deputy Secretary of the US Treasury Sigal Mandelker has announced that ABLV Bank was interested in organizing money laundering schemes. The bank had allegedly cooperated with partners involved in circulation of ballistic missiles.

ABLV Bank denies allegations voiced by FinCEN.

As it is known, European Central Bank made the decision to commence the liquidation process, which is to be realized in accordance with Latvia’s laws.

Following ECB’s instructions, FCMC applied payment restrictions on ABLV Bank on 19 February. Because ECB gave no instructions to lift restrictions, FCMC decided on the night to 24 February that unavailability of deposits took place in ABLV Bank.

ABLV Bank admits the decision made by FCMC means liquidation process will soon commence. ABLV Bank links the commission’s decision with political reasons.


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