CSSF suspends payments to ABLV Lux

Posted February 21, 2018

Mr Rimsevics, who has refused to step down but who was today suspended from his post, says he has received death threats.

Norvik bank has filed an worldwide legal complaint against Latvia in which it alleges that a "Senior Latvian Official" repeatedly sought "to extort monetary bribes", and threatened the bank when its owner and chairman, Grigory Guselnikov, refused to pay up.

Neither the police nor the anti-corruption authority have given details of the alleged request by Rimsevics - an European Central Bank rate-setter - for a bribe. Its owner is a Britain-based Russian, Grigory Guselnikov.

Mr Rimsevics was detained on Saturday and released two days later on bail.

The European Central Bank on Monday froze all payments by ABLV, whose financial position deteriorated after the US Department of Treasury last week imposed sanctions on the Latvian bank for its alleged role in money laundering schemes.

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No, says Prime Minister Maris Kucinskis.

In a bid to increase it's global rating, Norvik last month hired former North Atlantic Treaty Organisation secretary-general, Anders Fogh Rasmussen, as deputy head of the bank's council.

Latvia's central bank governor Ilmars Rimsevics speaks to the media during a news conference in Riga, Latvia February 20, 2018.

The confusing, rival claims of wrongdoing will deepen worries about the transparency of parts of Latvia's banking sector.

The International Monetary Fund has repeatedly urged Latvia to be vigilant over non-resident deposits - mostly held for clients in Russian Federation and the CIS - and strengthen the enforcement of rules to combat terrorism funding and money laundering.

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A number of small banks have been punished in recent years over breaches of those rules. We previously have blogged about FinCEN's powers pursuant to Section 311 of the U.S. Patriot Act to designate institution "of primary money laundering concern" and impose a special measurewhich effectively cuts off the bank's access to the U.S. financial system by requiring U.S. institutions as well as foreign institutions that create an indirect link between the foreign institution and the U.S.to sever ties with the designated bank.

Also, ABLV Bank is carrying out stabilisation of deposits in order to extend their maturity.

The U.S. announcement triggered deposit withdrawals of around 600 million euros, or 22 percent of total deposits, ABLV said on February 19.

ABLV managers were meeting European Central Bank supervisors on Tuesday to outline a survival plan.

"We have confidence in the responsible supervisory authorities and we consider as far as the governor is concerned that this is a matter for national enforcement authorities and we have no further comments to make in that respect", said Commission spokesperson Margaritis Schinas. Without a credible plan, supervisors could declare the bank failing or likely to fail. "ABLV facilitated transactions related to North Korea after the bank's summer 2017 announcement of a North Korea "No Tolerance" policy", the Treasury's Financial Crimes Enforcement Network wrote in a notice this month.

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