Latvia’s Central Bank Rocked By Bribery, North Korean Sanction Violations

Latvia’s banking system is facing more issues. Not only did one bank have to request emergency support after U.S. officials accused it of helping to breach North Korean sanctions, but the chief of the country’s central bank has also been hit with bribery allegations.

According to Reuters, this is just the latest scandal for the Baltic country’s financial system. Last year, two Latvian banks were fined more than 2.8 million euros ($3.26 million) for allowing clients to violate sanctions imposed by the European Union and United Nations on North Korea. Three others received smaller fines.

Now, the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) revealed that ABLV Bank, Latvia’s third largest lender, “had institutionalized money laundering as a pillar of the bank’s business practices.”

It also said that some of the alleged activities were related to North Korea’s ballistic missiles program, and accused bank executives and management of bribing Latvian officials to hide their activities.

ABLV said it had sought temporary liquidity support from the central bank after 600 million euros were withdrawn by customers.

“We don’t participate in any illegal activities,” ABLV Bank Deputy CEO Vadims Reinfelds told a news conference. “There are no violations of sanctions.”

In addition, the European Central Bank stopped all payments by ABLV and imposed a moratorium so that the bank and Latvian authorities can assess the situation. The suspension is only expected to last a few days.

Latvia’s own central bank said it had agreed to provide 97.5 million euros’ worth of funding to ABLV.

In the meantime, Ilmars Rimsevics, the chief of Latvia’s central bank, was arrested on bribery charges after police searched his office and home. He has denied the charges.

But Prime Minister Maris Kucinskis had called on Rimsevics to step down: “I can’t imagine that a governor of the Bank of Latvia detained over such a serious accusation could work.”


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