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Report: ABLV Bank defends conduct as deposit outflows reach €600M


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Report: ABLV Bank defends conduct as deposit outflows reach €600M

Vadims Reinfelds, deputy CEO of Latvian lender ABLV Bank AS, said the bank had committed "no violations of sanctions" in the wake of a proposal by the U.S. Treasury Department's Financial Crimes Enforcement Network, or FinCEN, to ban it from opening or maintaining a correspondent account in the U.S. amid allegations of money laundering, Reuters reported.

Reinfelds told a news conference Feb. 19 that the bank does not "participate in any illegal activities," the same-day report said. A few days earlier, FinCEN said ABLV's management allowed the bank and its staff to set out money laundering schemes, making it a target for persons involved in organized crime, weapons proliferation, corruption and sanctions evasion, including those linked to North Korea's ballistic missile program.

The bank has already contacted U.S. Department of Treasury officials to start negotiations and provide all necessary available information and to carry out necessary corrections, Reinfelds said Feb. 14. Referring to the North Korean case, Reinfelds said the regulator had initiated "an administrative matter," which was settled in November 2017, concluding that the bank committed "no violations of international, including European Union, sanctions, national sanctions of the Republic of Latvia, as well as sanctions imposed by the USA, detected in the operation of the bank."

ABLV requested temporary liquidity support from the Latvijas Banka after seeing about €600 million in deposit outflows, representing about 22% of its total deposits, Reuters said in a separate report. The Latvian central bank agreed to provide €97.5 million in funding, but ABLV has reportedly not yet received the funds.

ABLV has said it had sufficient liquidity and capital, and that it will not seek a government bailout.

Meanwhile, Latvian Prime Minister Maris Kucinskis criticized officials at another Latvian lender, JSC Norvik Banka, after they said Latvijas Banka Governor Ilmars Rimsevics had demanded a €100,000-per-month bribe from Norvik to do business in the country.

Chairman Grigory Guselnikov and CEO Oliver Bramwell told the Associated Press that Rimsevics was the "senior Latvian official" accused in their official complaint to a World Bank arbitration body of having attempted "to extort monetary bribes" and of retaliating when Norvik refused to pay. Guselnikov told the AP that Norvik Banka was subjected to higher capital requirements after refusing to pay the amount demanded by Rimsevics, who described the payments as something all Latvian banks did.

Rimsevics was detained Feb. 17 and questioned over suspicions of demanding bribes, which he denies.

Kucinskis told reporters at a press conference that Norvik Banka's accusations were likely an "attempt to harm the state's image," Bloomberg News reported Feb. 20. He added that Norvik Banka had not submitted any documentation about their accusations to Latvian authorities.

Rimsevics, meanwhile, said at a news conference that he had received death threats and that he would not resign, according to the Financial Times. As central bank governor, Rimsevics is a member of the ECB's rate-setting governing council.

The FT said Rimsevics' detention was not related to the allegations by Norvik Banka, which he said he been suffering from financial problems.

"At the moment I've taken the decision not to step down, because I'm not guilty," said Rimsevics, who has been suspended as governor. "My resignation would allow people such as Guselnikov to triumph, to continue spreading lies over many pages."