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Chief compliance officer of Latvian bank ABLV resigns amid scandal


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Chief compliance officer of Latvian bank ABLV resigns amid scandal

Aleksandrs Pāže resigned as chief compliance officer and a board member of embattled Latvian lender ABLV Bank AS on Feb. 22.

Pāže's departure comes as the bank faces allegations of money laundering and terrorism financing, noncompliance with regulations and international sanction violations. CEO Ernests Bernis told reporters that Pāže's resignation forms part of the bank's bid to restore its reputation, which would see a shakeup in the bank's board, Public Broadcasting of Latvia wrote the same day.

In a statement, Pāže said he is "confident" that he complied with law provisions and international best practices in relation to his anti-money laundering and terrorism financing and sanction control work, echoing the bank's stance that it has never violated any laws or sanctions.

"I say again: we have never given bribes," Bernis reportedly said.

The U.S. Treasury Department's Financial Crimes Enforcement Network, or FinCEN, proposed Feb. 13 to ban the lender from opening or maintaining a correspondent account in the U.S., saying it found that the bank's management permitted employees to engage in money laundering schemes and other illicit activities.

Days later, the country's anti-corruption agency reportedly questioned central bank Governor Ilmars Rimsevics for eight hours in connection with the allegations. Rimsevics told Bloomberg News in an interview that he will not resign, even temporarily.

Meanwhile, ABLV spokesman Arturs Eglitis said ABLV has asked the Latvijas Banka, the central bank, for emergency liquidity assistance of as much as €480 million, Reuters reported the same day. This comes after the bank recorded deposit outflows of over €600 million and the European Central Bank imposed a temporary moratorium on the bank's debit operations in all currencies due to the FinCEN decision.

A spokesman told Reuters that over 1,000 clients have pledged to keep €420 million in long-term deposits of between 6 months and a year, the newswire reported separately. The spokesman reportedly added that the pledge would stand even if the ECB's moratorium is rescinded. ABLV had previously said it had sufficient liquidity and capital, and that it will not seek a government bailout.

The scandal has also put the spotlight on the ECB, which directly supervises Latvian banks, Reuters said in another Feb. 22 report. However, Daniele Nouy, the ECB's supervisory chief, said the ECB lacks the powers to uncover certain anti-money laundering breaches, saying that is the task of national authorities.