RIGA, June 27 (Reuters) - Latvia’s banking watchdog said on Tuesday it had fined three local banks 641,000 euros ($722,500) in total for allowing clients to breach European Union and United Nations sanctions imposed on North Korea.
Between 2009 and 2015, a number of customers of Baltikums Bank, Privatbank and Regionala Investiciju Banka used offshore companies in Panama, Belize, Great Britain to transfer payments to North Korea, bypassing international sanctions, the regulator said.
“A situation where banks are being used or indirectly end up in chains of actors evading sanctions is unacceptable,” said Peteris Putnins, head of Latvian Banking watchdog told reporters.
The banks were fined for breaching rules on preventing money laundering and terrorism financing.
Putnins said the internal control systems at the banks, which mainly serve non-resident clients, had been lax.
Both Baltikums Bank and Privatbank said they would improve their internal control systems.
Regionala Investiciju Banka said in an emailed comment to Reuters that the bank has already been working to upgrade its anti-money laundering measures in recent years, including reviewing its client base.
The fines are a result of information from an ongoing investigation carried out by the Federal Bureau of Investigation in the United States.
North Korea is a pariah state and its nuclear weapons programme has drawn sanctions from the United Nations, the United States, the European Union, South Korea and Japan.
$1 = 0.8868 euros Reporting by Gederts Gelzis; editing by Simon Johnson and Louise Heavens