• ABLV Bank capital adequacy and liquidity still at very high levels
• No restrictions imposed on the activities of the Bank
Following the statement of the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) about the Latvian commercial bank ABLV Bank AS as the institution of primary money laundering concern, the Financial and Capital Market Commission (FCMC) has ensured the necessary supervisory activities in cooperation with the European Central Bank (ECB), as well as conducted analysis of information obtained from the US authorities.
FCMC Chairman Pēters Putniņš: “All indications must be examined before drawing any conclusions and taking any actions. Currently, circumstances are being clarified to ensure stabilization of situation. The role of the regulators is not only to apply punitive measures. Our key purpose is to stabilize the situation and protect the interests of depositors. It should be noted that supervision over ABLV has been very tight on part of FCMC in particular over the last years; therefore we are not caught unawares. One cannot deny that Latvia is still facing the AML-related problems. However, significant remedial work has been done in the Bank by the FCMC over last two years. The fines, largest ones than ever in Latvia, have been imposed on ABLV Bank for respective breaches. Investments that we have required for improvements of the Bank’s internal control systems amount to almost 20 million euro. And the first agreement with the Bank about addressing the deficiencies has been completed. There has been no such precedent for cooperation previously. Today’s developments to a great extent have been affected by the past events, having a great impact on the Bank’s fate at present. These are the aftermaths of historical legacy. We always recall that reputational risk transforms into specific material risk in such cases. It should be borne in mind.“
FCMC head confirms that ABLV Bank capital adequacy and liquidity are still at high levels, and FCMC has not imposed any restrictions on the activities of the Bank
FCMC Chairman Pēters Putniņš: “The main substantive issue that now should be addressed by the Bank, with our assistance as far as it is possible, is overcoming as soon as possible its isolation where the Bank could likely find itself after such a statement, as well as reducing its impact on the Latvian financial sector. Our role is to take care to ensure compliance with regulatory indicators, so that the Bank would be able to ensure that it meets its obligations to the clients based on its infrastructure and assets.”
FCMC informs that ABLV Bank currently maintains communication with the authors of the statement and is responsible for further solutions management. Written objections to the proposal issued by the US Department of the Treasury it can be submitted within 60 days, and the deadline should observed.
FCMC Chairman Pēters Putniņš: “Every person has the rights of defence of their interests. At this moment it would be better not to exacerbate the situation and draw the dreariest scenarios. I call upon the Bank to provide the media and clients with as much information as possible about the key developments in reducing risks and stabilizing the situation.“
According to the supporting documents of the US report, in a couple of past years FCMC has led significant efforts to reform Latvia’s regulations and enforcement regime, as well as monitored developments in the recommendation enforcement in the banking sector.
FCMC Chairman Pēters Putniņš: “This work will continue, any concerns about reputation of our financial sector must be addressed. We have to recognise that we have had problems. The authority’s opinion of apparent problems has been regularly released, including applying fines and other sanctions to the Latvian banks. There is still long way ahead, and it clear to everyone in the sector that not only the planned addressing the identified deficiencies will be continued but also review of foreign customer base.”
As regards the Bank’s possible illegal activities attempting to influence officials in Latvia, FCMC Chairman Pēters Putniņš pointed out: “Our authority does not possess any information on such dealing. As regards our organisation, the FCMC– there are no such problems. A paragraph from the FinCEN report regarding the assessment of the FCMC’s performance over past two years is evidence of above. This text is a positive statement that there is no risk of corruption within the FCMC. Otherwise this paragraph would not the included.“
From Proposal of Special Measure against ABLV Bank, as a Financial Institution of Primary Money Laundering Concern:
*”In a positive development, since 2015, the FCMC has led significant efforts to reform Latvia’s AML/CFT regulations and enforcement regime. However, as noted in the aforementioned 2014 ECFIN report, positive changes need to be consistently implemented jointly with the banks. The need to improve the institutional capacity remains a long-term challenge due to the complexities of investigating and prosecuting money laundering.”
For further information:
Financial and Capital Market Commission
Phones: +371 67774807; + 371 67774808;
Mob.: +371 29476003; +371 29467009
E-mail: firstname.lastname@example.org, email@example.com