US takes action against Latvia’s ABLV Bank for money laundering
The US Department of the Treasury’s Financial Crimes Enforcement Network (‘FinCEN’) has announced that it is seeking sanctions against Latvia’s ABLV Bank for money laundering.
FinCEN has issued a finding flagging ABLV as a primary money laundering concern, that has ‘institutionalized money laundering as a pillar of the bank’s business practices’ (13 February). The lack of effective anti-money laundering, combating the financing of terrorism, and sanctions policies and procedures have enabled illicit transactions, including those connected with the North Korean ballistic weapons programme and ‘corrupt politically exposed persons’ funnelling billions of dollars through the financial system, said FinCEN in a statement.
FinCEN has also issued a notice of proposed rulemaking under s311 of the USA PATRIOT Act, which would cut the bank off from the US financial sector by prohibiting it from maintaining a correspondent bank account in the United States.
‘FinCEN will continue to take action against foreign banks that disregard anti-money laundering safeguards and become conduits for widespread illicit activity,’ said Steven Mnuchin, Secretary of the Treasury. ‘Deficient practices at banks foster a wide array of illicit conduct, including activity linked to North Korea’s weapons program and corruption connected to Russia and Ukraine.’
In a statement, ABVL Bank said:
‘ABLV Bank strongly denounces the use of financial institutions in illegal actions, including money laundering, terrorism financing and circumventing sanctions. The bank fully supports the efforts of the U.S. Department of the Treasury in combating such criminal activity.
‘ABLV Bank has already contacted officials at the U.S. Department of the Treasury in order to start negotiations and provide all and any necessary information at our disposal and to carry out all necessary corrections.
‘ABLV Bank points out that its internal control system in the field of the prevention of money laundering, terrorism financing and circumvention of sanctions, as well as the implemented control solutions have been audited and inspected both by the regulator and by international auditors. ABLV Bank follows a zero tolerance policy regarding those clients, whose transactions may be related to money laundering, terrorism financing or violating sanctions.
‘However, if someone has manipulated the bank systems to defeat the comprehensive controls in place and to elude audit, then the bank puts the highest priority on uncovering the illegal acts and reporting this to the appropriate law enforcement authorities. We firmly reject everyone who tries to use our bank for illicit purposes.’
Earlier today, the bank announced the resignation of one member of its board, Aleksandrs Pāže: ‘In his statement of resignation, Aleksandrs Pāže says: “My decision is based on the statement of the Financial Crimes Enforcement Network of the U.S. Department of the Treasury (FinCEN) released on 13 February regarding ABLV Bank, AS. I am confident that my work in the field of prevention of money laundering and terrorism financing, and in the field of controlling fulfilment of sanctions has always been in compliance with the provisions of the law and international best practices. ABLV Bank has done tremendous work to comply with all international regulations and requirements regarding this issue. Given the complicated situation and the need to create maximally favourable conditions for the stabilisation of the bank’s operation, from the point of view of good corporate governance and ethics, right now, I believe I cannot continue performing my duties as a member of the board, so I am asking to accept my resignation as a member of the board.”’
FinCEN’s press release can be found here:
https://www.fincen.gov/news/news-releases/fincen-names-ablv-bank-latvia-institution-primary-money-laundering-concern-and
FinCEN’s Notice of proposed rule-making can be found here:
https://www.fincen.gov/sites/default/files/federal_register_notices/2018-02-13/ABLV%20NPRM%2020180212%20%28Final%20for%20FR%20Submission%29.pdf
