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ABLV sanctions case: Ministry of Finance has not yet seen the results of its negotiations with the US

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Photograph: Zane Biter / LETA
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There has been no visible progress so far in discussions with US counterparts of the Ministry of Finance regarding the withdrawal of charges against Latvia presented in the 2018 US sanctions draft against the ABLV bank. The Ministry of Finance wants to start the “removal process” of the document in question as it hinders the withdrawal of investments, the LTV program “de facto” reports.

Meanwhile, Marshall Billingsley, the former US deputy finance secretary for terrorism financing issues, for which ABLV bank has been proposed to split from dollar settlements, describes Latvia’s actions in this direction as “disturbing”.

“Personally, I would be surprised to see that the document has been removed. And I’m not sure it’s very wise for the current Latvian Minister of Finance to lobby for the repeal of this document, given what we know, do and know about ABLV. “This was the joint money laundering activity of the banks at its peak,” Billingsley said in an interview with LTV.

With Ilze Znotiņa, head of the Financial Intelligence Service, not appointed for a second term, “these are alarming signs, but they shouldn’t take away the fact that the Latvian government has done an incredible job clearing it up.” financial system”.

It was not possible to learn what to expect from the ABLV bank sanction bill from the US Treasury Department. The ministry did not give an interview to the LTV program.

In June, an article appeared in the business media “Bloomberg” about Finance Minister Jānis Reira’s (JV) talks with US Treasury employees in Washington regarding the cancellation of the ABLV report. Following this, the Latvian Ministry of Finance issued a statement stating that Reirs did not ask the bank to lift restrictions, but invited the United States to submit an assessment of reforms in the Latvian financial sector.

“My request was to initiate the procedure for the annulment of this decision to overturn the decision, which pointed out the problems in the country, not ABLV,” Finance Minister Reirs said in a “de facto” interview. months ago and the accusations against Latvia had already been fixed, he added.

Reir said that it was not his invention to start negotiations with the United States, but that the government had the authority. In at least one case, the law prevented an unnamed international financial institution from investing in Latvia.

Reirs met again with US officials last week. In its written response to the program, the Latvian Ministry of Finance announced that it has provided the US with up-to-date information on the improvements implemented in the area of ​​anti-money laundering, but no decision has been taken at this time.

Welfare Minister Gatis Eglītis (K) also spoke about the “removal” of the document in the US.

ABLV bank liquidator attorney Jānis Rozenbergs responded to the LTV program that the bank cooperates in the liquidation process and informs various institutions, including the US financial supervisory authorities, if they receive such requests. Rosenberg wrote that the liquidation of ABLV Bank will continue and be completed regardless of FinCEN’s final decision.

Almost five years ago, the US Treasury Department and its agency FinCEN offered to disconnect ABLV bank from dollar payments on suspicion of money laundering. The market reacted instantly, the bank had to be liquidated.

Billingsley, then US deputy finance secretary, says that during the Obama administration, during several visits to Latvia before Billingsley took office, clear warnings were given that the US was concerned about the activities of ABLV and other banks. “During the Trump administration, we started to involve the Latvian government pretty quickly to try to end this systemic money laundering,” Billingsley recalls.

As a result, the US Treasury Department decided to use a special law against the ABLV bank, which was implemented by the US after the terrorist attacks of September 11, 2001, with the powers specifically granted in Article 311 of this law.

“We concluded that the Latvian government, for various reasons, not only lacks the necessary laws and regulations, but also lacks the political will to take the tough decision to stop the money laundering operation known as ABLV. And for that reason, the US Treasury Department has been skeptical of our financial system and our NATO allies. “To protect their financial systems, they were compelled to exercise Section 311 rights and publicly name ABLV as a source of money laundering concerns.” .

The US Treasury Department had reason to believe that the owners and managers of ABLV bank had made money laundering a pillar of the bank’s business, and also accused the bank of bribing Latvian officials.

ABLV did not deny transactions with high-risk customers in its responses, but denied corruption and noted that the disclosures lacked evidence. Some of the transactions in question either never took place or took place before individuals were sanctioned. The bank proactively investigated suspicious cases.

ABLV also gave signs that the bank was defamed in the US by Ilmars Rimševičs, the former head of the Bank of Latvia, who is now accused of corruption.

It is true that a well-informed source said “de facto” that the Americans did not follow Rimšević for a while because they saw him as corrupt. The US also did not trust Pēteris Putniņas, then head of the Financial and Capital Markets Commission, believing that he was not telling the truth.

There are mixed assessments as to whether the US report on ABLV is more of a reprimand for a bank or a signal to the entire financial industry as a whole.

“This is not a general statement that the country has a high risk of money laundering. This tool has a very specific focus on certain financial institutions that should be highlighted as money laundering centers that have become so important that the US needs to take much stricter measures,” according to the US Department of the Treasury. Jonathan Rush, professor of science at the Department of the Treasury.

By contrast, Kevin Hall, the North American editor of the investigative journalism project OCCRP, notes that the bill against the ABLV bank is a “very blind tool.” Technically, it targets a specific bank, but in a small jurisdiction like Latvia, it has a system-wide chain reaction.

OCCRP’s money laundering investigations were among those that the US referred to in its report on ABLV Bank. Hall explains that the anti-ABLV mechanism is very powerful, but historically there have been very limited opportunities to combat it. Either work together to fix things or lose access to the global financial system.

“You can safely assume that the U.S. Treasury Department wouldn’t have used this tool if it was just one bad market participant, but the country as a whole would do a great policing job,” he adds.

ABLV and its partner, Ernests Bernis, hired lobbyists in Washington after the US Treasury Department’s deadly report for the bank. According to the lobbyist database, he and the bank paid Mercury $1.73 million. The last payments were made in 2020. Three years ago, to “de facto” questions about hiring lobbyists, Bernis replied that “reputation is the most important thing in the 21st century.”

The Latvian Prosecutor’s Office accused Bernis and seven others of laundering 2 billion euros in money. There are no charges for the alleged North Korean deals and bribery. It should be noted that Latvia does not receive all relevant information from the US, as FinCEN’s records on bank investigation cases are not public.

Source: Tv Net

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