NP: ABLV blames Latvian officials for misleading foreign institutions
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.