NP: ABLV blames Lat­vian of­fi­cials for mis­lead­ing for­eign in­sti­tu­tions

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Last week, the rep­u­ta­tion of Latvia’s sec­ond largest bank – ABLV – was se­ri­ously im­pacted. It is be­lieved that money laun­der­ing was this bank’s main op­er­a­tion, and that it failed to com­ply with the pro­hi­bi­tion on co­op­er­a­tion with North Korea. The bank is also ac­cused of bribery. US Depart­ment of the Trea­sury Fi­nan­cial Crimes En­force­ment Net­work rarely speaks so di­rectly of any credit in­sti­tu­tion, says Nekā per­son­īga pro­gramme.

ABLV Bank claims it is be­ing de­famed

The pro­gramme men­tions that the bank be­lieves it is be­ing de­famed. ABLV Bank’s chair­man Ernests Ber­nis al­lows that some of­fi­cial of Lat­vian cen­tral fi­nance in­sti­tu­tion may have mis­led for­eign in­sti­tu­tions about ABLV’s ac­tiv­i­ties.

Both the bank and Latvia’s Fi­nance and Cap­i­tal Mar­ket Com­mis­sion claim that FinCEN’s re­port de­tails old and for­got­ten cases. ABLV Bank claims it has amended its ways and that no vi­o­la­tions are al­lowed any more. The prob­lem is that most of the fact’s de­tailed in FinCEN’s re­port ac­count for 2016 and 2017.

US Depart­ment of Trea­sury is very di­rect in its ac­cu­sa­tions

It should also be said that the US in­sti­tu­tion is very di­rect in its ac­cu­sa­tions. 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.

Nekā per­son­īga re­ports that FinCEN be­lieves ABLV Bank’s busi­ness model was formed with­out tak­ing into ac­count all the pos­si­ble risks. This has led to co­op­er­a­tion with busi­nesses un­der sanc­tions by USA and the UN. Ac­cord­ing to FinCEN, ABLV Bank has co­op­er­ated with North Korean banks – For­eign Trade Bank, Ko­ryo Bank, Ko­ryo Credit Devel­op­ment Bank, Korea Min­ing and Devel­op­ment Trad­ing Cor­po­ra­tion, as well as Ocean Mar­itime Man­age­ment Com­pany. FinCEN has un­cov­ered that pro­hib­ited ac­tiv­i­ties had taken place after the bank de­clared it zero tol­er­ance pol­icy (sum­mer 2017). In au­tumn 2017, NP ref­er­enced the ar­rest of Tai­wanese cit­i­zen Alex Tsai in Es­to­nia four years prior. This man was the CEO of Trans Mer­its Co. Ltd and Global In­ter­face Com­pany Inc. Al­legedly he helped some North Korean firm trans­fer money to de­velop a weapon of mass de­struc­tion, in­clud­ing nu­clear arms and bal­lis­tic mis­sile pro­grammes. Money was trans­ferred us­ing a net­work of dummy com­pa­nies.

NP also men­tions that the doc­u­ments of UN sanc­tions de­tail North Korea’s net­work of dummy busi­nesses cre­ated in the coun­try, as well as China, Rus­sia and Sin­ga­pore. North Korea’s For­eign Trade Bank has also had deal­ings with Rus­sian Vneshekonom Bank and Sput­nik Bank.

Jour­nal­ists of the pro­gramme also men­tion that Korea Min­ing and Devel­op­ment Trad­ing Cor­po­ra­tion has been on the list of UN sanc­tions since 2009. It is ac­cused of fund­ing bal­lis­tic mis­siles devel­op­ment pro­gramme. Ocean Mar­itime Man­age­ment Com­pany has been un­der UN sanc­tions since 2004. In­ter­na­tional in­spec­tors caught the com­pany trans­port­ing mis­siles in 2013.

ABLV Bank cat­e­gor­i­cally de­nies hav­ing any co­op­er­a­tion with North Korea

ABLV press-sec­re­tary Artūrs Eglītis told Nekā per­son­īga: «We have not per­formed any trans­ac­tions with any of the afore­men­tioned banks or busi­nesses be­fore or after our zero tol­er­ance pol­icy.» In re­la­tion to any co­op­er­a­tion with North Korea, the Fi­nance Cap­i­tal and Fi­nance Com­mis­sion (FCMC) per­formed an in­spec­tion in 2017. Un­like FinCEN, FCMC con­cluded that the sanc­tion regime was never breached. Lat­vian watch­dog ex­plains their de­ci­sion with dif­fer­ent laws. Lat­vian and Euro­pean reg­u­la­tions pro­vide re­spon­si­bil­ity for di­rect co­op­er­a­tion. Reg­u­la­tions in the US also pro­vide re­spon­si­bil­ity for in­di­rect co­op­er­a­tion, the pro­gramme re­ports.

FinCEN re­port men­tions that ABLV Bank’s man­ag­ing of­fi­cers had used bribes to in­flu­ence Lat­vian of­fi­cials. The bank cat­e­gor­i­cally de­nies do­ing that, adding that the in­sti­tu­tion’s rep­u­ta­tion is there­fore un­der at­tack. ABLV also men­tions ex­pe­ri­enc­ing pres­sure from Lat­vian fi­nance su­per­vi­sory in­sti­tu­tions.

ABLV Bank’s chair­man Ernests Berns told Nekā Per­son­īga: «I will say it again – we have never given bribes to of­fi­cials. Per­haps that is one of the rea­sons why some­one is try­ing to de­fame us. We had men­tioned it al­ready, but de­vel­op­ments of the last sev­eral days are based en­tirely on false in­for­ma­tion. We ask au­thor­i­ties to check if any high-rank­ing of­fi­cials of cen­tral fi­nance in­sti­tu­tion has not used their of­fi­cial power to mis­lead Lat­vian and for­eign ograniza­tions». FCMC chair­man Pē­teris Put­niņš was asked if CPCB has turned to the com­mis­sion in re­la­tion to pos­si­ble vi­o­la­tions re­cently un­cov­ered in the bank.

He told jour­nal­ists: «I can nei­ther con­firm nor deny it».

Nekā per­son­īga also re­ports that one the next day after re­ceiv­ing the re­port from USA, CPCB an­nounced com­mence­ment of a crim­i­nal case. Based on what the chief of CPCB has said, it can be con­cluded that the bu­reau has been aware of ABLV Bank’s at­tempts to bribe of­fi­cials for some time.

Chief of CPCB Jēk­abs Straume says: «I can say that the bu­reau has been aware of cer­tain mat­ters re­gard­ing ABLV Bank for some time. Amer­i­can law en­force­ment in­sti­tu­tions pro­vided as­sis­tance, and our bu­reau per­formed cer­tain tasks as well. We do not have any­thing con­crete to say. Once ev­ery­thing is clear, we will be able to com­ment fur­ther.»

The man­ager of FCMC de­nies the claims of any of­fi­cials of the in­sti­tu­tion be­ing some­how fi­nan­cially in­flu­enced, the pro­gramme notes. Still, the at­ti­tude to­wards the bank has been gen­tle so far. In 2016, FCMC ap­plied a fine of EUR 3.17 mil­lion for al­low­ing turnover of dirty money. A year-long pro­ba­tion pe­riod was pro­vided as well. Dur­ing this pe­riod, FCMC said it would not pun­ish the bank. It should be added that be­cause of dirty money USA had lim­ited Lat­vian banks’ trans­ac­tions us­ing US dol­lar. ABLV Bank had tried over­turn­ing this de­ci­sion last year.

Sim­i­lar com­plaints were voiced by FCMC in re­la­tion to Multibanka in the past. This bank at­tracted new in­vestors from Rus­sia – Rus­sian Pres­i­dent Vladimir Putin’s as­so­ci­ates Roten­berg broth­ers – and added changes to its op­er­a­tions to re­store the trust of US in­sti­tu­tions. Now the bank is called Merid­ian Trade Bank.

ABLV Bank’s press-sec­re­tary Eglītis men­tions: «Our ac­tiv­i­ties are aimed at co­op­er­a­tion. We want to work with our Amer­i­can col­leagues. Per­haps they do not have ac­cess to the full in­for­ma­tion.» An anony­mous high-rank­ing in­ter­na­tional fi­nance in­sti­tu­tion’s of­fi­cial in Wash­ing­ton told Nekā per­son­īga that change of lead­er­ship would be the first thing that would con­vince his as­so­ci­ates of ABLV Bank’s de­sire to change.

Ieva Čīka/LETA

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