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On ABLV Bank Further Actions

On ABLV Bank Further Actions

ABLV sought emergency funding from the Latvian central bank, which bought 13 million euros in bonds and has agreed to provide 97.5 million euros in loans.

Authorities say arrest of central bank chief is unrelated to suspicions centered on the country's third biggest lender. On Monday, the Financial and Capital Markets Commission imposed a moratorium on ABLV Bank, on the urging of the ECB.

He told state television that, if he was permitted to, he would attend Wednesday's non-policy ECB meeting, where a central bank spokesman said deputy governor Zoja Razmusa would represent Latvia.

ABLV, which an office at 26 boulevard Royal in Luxembourg City, has been under the ECB's supervision since November 2014.

Rimsevics has served as Bank of Latvia's governor since 2001. ABLV has rejected FinCEN's allegations.

While the freeze halted deposit outflows, sources close to discussions said ABLV would be given just days to show it can meet its financial obligations. Not only this, the head of the country's central bank was held in custody over the weekend, accused of soliciting a bribe by Riga's anti-corruption agency. The measure, a first for the ECB, was necessary to stabilise outflows after a "significant deterioration of bank's financial position". The bank has enough funds, yet it needs time to regain access to them as soon as possible.

Latvian TV also claimed that insolvency administrator Maris Spruds is involved in the bribing efforts as well.

The Latvian banking chief also said he had received death threats, which he had reported to the police. Whatever the outcome, prohibiting ABLV from accessing the United States financial system would be a major blow; the country has the deepest financial markets and the dollar is key to worldwide trade.

Despite the fact that ABLV is the largest non-resident banking institution in Latvia, it allegedly failed to implement adequate AML controls commensurate with the high risk of providing banking services to shell companies and illicit actors using such means to hide organized crime, corruption, and evade sanctions.

ABLV isn't alone in having alleged ties to North Korea.

"Norvik bank" was fined 1.3 million euro in July 2017 for incomplete due diligence and monitoring of the non-resident banking transactions which resulted in the circumvention of the global sanctions against North Korea. Tighter regulation has already caused outflows of foreign cash from Latvian banks, which had been a popular choice for clients in the surrounding ex-communist region. Her ministry has changed its borrowing strategy and will refrain from refinancing operations in the near term, she said.