Fears for Latvian bank as ECB blocks payments


Latvian anti-corruption officials said Monday their case is not related to recent US allegations of fraud at Latvia's third largest bank.

Valdis Dombrovskis, a former Latvian prime minister who is now a Vice President of the European Union's executive arm, told a news conference national authorities should deal with the situation quickly.

Investigators from Latvia's Corruption Prevention and Combating Bureau looked to determine whether Rimsevics sought a bribe of at least $124,100. Data from the Russian border agency obtained by the AP confirms Rimsevics was in Russia at the time.

It did not say who might be behind what it called a "massive information operation from outside", but said it was "identical in structure and execution" to campaigns that preceded recent French, German and US elections. He has been a member of the ECB's governing council since 2014.

The Bank of Latvia said it could not comment on the investigation, but said it had a "zero tolerance policy in respect of corruption and other illicit activities".

The case against the ABLV stems from claims by the United States authorities that the bank has became a haven for money launderers and funnelled funds to North Korea in breach of global sanctions.

"I can't imagine that a governor of the Bank of Latvia detained over such a serious accusation could work", the prime minister said on Latvian television.

Latvia's Economics Minister Arvils Aseradens, speaking on Radio Latvia, also said the governor should consider resigning.

Once word spread that ABLV was managing accounts for clients connected to North Korea, including the sanctioned Foreign Trade Bank that handles the funding for Pyongyang's banned nuclear weapons programme, key financial institutions finally began cutting ties to the bank and thus denying it access to outside funding. Five Latvian banks, including ABLV, agreed a year ago to record fines for failing to perform adequate due diligence and gather sufficient information on transactions and beneficiaries of deals linked to North Korea.

Rimsevics, 52, was released late Monday following 48 hours in custody after his friend put up a 100,000 euro bail, local media reported. ABLV has rejected FinCEN's allegations.

The ECB said it had agreed to lend ABLV €97.5 million ($121 million) to help it with liquidity, with high-quality assets as collateral. Without a credible plan, supervisors could declare the bank failing or likely to fail.

The European Central Bank (ECB) waded into the row, freezing payments for the ABLV bank.