RIGA, June 12, (Reuters) - Latvia’s banking regulator on Tuesday approved the self-liquidation of ABLV Bank, the country’s third-largest financial institution.
The U.S. Treasury Department’s Financial Crimes Enforcement Network has accused ABLV of institutionalising money laundering, violating sanctions imposed on North Korea and using bribery to influence Latvian officials.
In February, ABLV - which has been focusing on serving non-resident clients - was ruled failing or likely to fail by the European Central Bank.
“The FCMC’s Board has approved the bank’s application (plan) for self-liquidation and tomorrow the process begins,” Peters Putnins, head of the Financial and Capital Market Commission, told a press conference.
The regulator said that compared to other forms of liquidation, a self-imposed liquidation allowed it better control over the entire process and was a more appropriate way to ensure that the bank’s assets were preserved.
“Of course, we will control everything that is connected with the AML (Anti-Money Laundering) side and the bank itself will have to think about it internally very hard,” said Putnins.
The privately held bank denies any wrongdoing and it turned to the European Court of Justice, asking it to review decisions of the ECB and the Single Resolution Board at the start of May.
The U.S. sanction proposal against ABLV and investigation by the police into possible bribery of the governor of the country’s central bank Ilmars Rimsevics, who denies any wrongdoing, are Latvia’s worst financial troubles in a decade.
The Latvian government has adopted an action plan for cleaning up the non-resident banking sector and has already banned financial institutions from cooperating with shell companies that fulfil certain criteria.
Reporting by Gederts Gelzis; Editing by Daniel Dickson and David Evans