The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) on Tuesday proposed designating a leading Latvian bank as a primary money laundering concern because of alleged connections with North Korea and with criminals in Russia and other countries.
FinCEN said ABLV Bank has facilitated transactions on behalf of UN and U.S. sanctioned North Korean entities and financial institutions.
ABLV Bank, based in Riga, is Latvia’s third biggest bank. It has subsidiaries in Luxembourg and the United States, and offices in Russia, Ukraine, and Hong Kong.
Banks designated as primary money laundering concerns can’t maintain correspondent accounts with U.S. banks. That means they can’t do business in U.S. dollars.
FinCEN said Tuesday,
ABLV’s management permits the bank and its employees to orchestrate money laundering schemes; solicits high-risk shell company activity that enables the bank and its customers to launder funds; maintains inadequate controls over high-risk shell company accounts; and seeks to obstruct enforcement of Latvian anti-money laundering and combating the financing of terrorism (AML/CFT) rules in order to protect these business practices.
The bank denied FinCEN’s allegations.
A statement on its website said, “ABLV Bank would like to point out that in its operation it is consistently obeying all and any Latvian and international, including European Union, laws and regulatory requirements.”
ABLV said it believes FinCEN proposed the action using “false information.”
“The [FinCEN] report leaves out significant information on the bank’s efforts in the field of money laundering and terrorism financing prevention in the last years,” ABLV said.
The bank said it is taking steps to rebut FinCEN’s allegations and head off the proposed designation.
FinCEN said ABLV has become “attractive to a range of illicit actors engaged in organized crime, weapons proliferation, corruption, and sanctions evasion.”
“ABLV failed to mitigate the risk stemming from these accounts, which involved large-scale illicit activity connected to Azerbaijan, Russia, and Ukraine,” according to FinCEN.
Richard L. Cassin is the publisher and editor of the FCPA Blog.