FCMC completed investigations into „ABLV Bank” and „Reģionālā investīciju banka” – no violations found
The Financial and Capital Market Commission (FCMC) has completed examination of AS „ABLV Bank” and AS „Reģionālā investīciju banka” following information emerging in the study The Odessa Network by the non-profit research organization „C4ADS” in September 2013 on mapping facilitators of Russian and Ukrainian arms transfers and dropping hints about their links with the banks. Examining the customer transactions mentioned in the study, no breaches of regulatory requirements were established in the bank activities by FCMC.
Moreover, during inspections no evidence were found of any bank involvement in facilitating or financing arms deals as stated in the study. It should be mentioned that in accordance with the FCMC Regulations on Enhanced Customer Due Diligence the customers whose commercial activities are related to trading in weapons and ammunition are considered as having high risk of money laundering and terrorist financing, therefore enhanced monitoring is applied to their activities. When starting relationship with such customers, banks have to assess potential reputation risk as well. Being aware of potential risks, the mentioned banks in their internal policies have refused to cooperate with the customers, who are engaged in global arms trading.
FCMC conducts regular inspections of banks as well as off-schedule inspections in case of appearing any information of alleged involvement of Latvian banks. Purpose of the inspections is to find out whether the banks comply with the provisions of the Law on the Prevention of Laundering the Proceeds from Criminal Activity (Money Laundering) and of Terrorist Financing and verify the quality and effectiveness of their internal control systems for preventing the anti-money laundering. In 2013, FCMC carried out 16 examinations of banks.
Performing its supervisory functions the FCMC provides that banks constantly improve their internal control systems in line with requirements of international standards, European Union directives and good practice for purposes to prevent the use of the Latvian financial system for money laundering. Detecting any suspicious or unusual customer transactions, banks and other persons have a duty to notify the Office for Prevention of Laundering of Proceeds Derived from Criminal Activity (Control Service Latvian FIU) of the suspicious or unusual transactions.
Head of Communications Department
Financial and Capital Market Commission
Phone: +371 67774860