The US Treasury Department’s Financial Crimes Enforcement network (FinCEN) announced on Thursday that it was withdrawing a draft decision against Latvia’s ABLV Bank which was first issued in February 2018. The announcement came from the US Embassy in Latvia.
In the statement, FinCEN confirmed that its concerns about ABLV Bank in 2018 were valid, but it also has concluded that comprehensive steps that have been taken by the Latvian government and the relevant authorities to address the threats which ABLV caused to the international financial system have been effective.
Latvia has taken decisive steps toward preventing any further disruption by ABLV on Latvia’s reputation and financial system while bringing to justice those who have been charged with criminal offences. Latvia has also acted responsibly to prevent its abuse and criminal exploitation, protecting participants in the financial market by introducing multifaceted, targeted and irreversible reforms in anti-money laundering policies, regularly requirements, and the independence and co-operation capacity of the relevant authorities.
Latvia welcomes the fact that the FinCEN statement supports confidence in Latvia as a country where the rule of law prevails. The authorities are preventing any entrenchment of criminality in Latvia, strengthening confidence in the integrity and security of its financial system and promoting interest in Latvia among honest investors and international partners, thus enhancing the country’s competitiveness, the Latvian Finance Ministry has said. Latvia will continue to work with the European Union (EU) and global partners to identify and address existing and emerging risks.
The 2018 draft decision from FinCEN was published to address immediate risks to the international financial system, particularly in relation to transactions in US dollars. One aim was to inform the public at large about these issues. The publication of the draft decision also triggered a process whereby the bank’s owners and management could respond to the allegations by voluntarily working with FinCEN investigators to gain further information and thus to confirm or mitigate the concerns which US authorities had about the risk which ABLV and its activities were posing.
Since FinCEN declared that the ABLV Bank’s business practices were a pillar of serious financial crimes, the relevant authorities in Latvia conducted and are continuing to conduct independent investigations to establish facts and gain evidence. The ABLV Bank engaged in massive, multi-layered and international efforts to launder money through various bank accounts. Latvia worked with several foreign supervisory authorities, financial intelligence units and law enforcement agencies to address this fact.
This work was unprecedented in its scale and scope, and one result was the suspension of ABLV Bank activities and the bank’s self-liquidation. The bank’s license was withdrawn on July 11, 2018. In June 2023, the Latvian Prosecutor General’s Office filed charges with the Economic Court against ABLV Bank shareholders and management, charging them with the laundering of EUR 2.1 billion in criminal assets. Several employees and creditors are, in parallel, being tried for money laundering. New charges are still being filed on the basis of successful investigations by Latvian law enforcement.
Irrespective of this work, the FinCEN draft decision was also a stimulus for a critical review of Latvia’s policies and regulatory framework so as to align it with the country’s security, development and strategic co-operation objectives in the medium and long term. The resulting overhaul ensured that Latvia was not put on the grey list of the intergovernmental Financial Action Task Force (FATF), which is the world’s leading standard-setter in the fight against money laundering and financing of terrorism. Enhanced international co-operation also was far-sighted in terms of preventing Russia and other unfriendly countries from creating criminal and corruptive influence by using Latvia and its financial system as a staging ground. The International Monetary Fund estimates that the cost to FATF-listed countries is at least 1.4% of GDP each year in lost investments and increased costs, to say nothing of serious reputational damage.
Source: BNS
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