Latvian bank faces 311 notice for AML Compliance issues


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U.S. Treasury levels major AML Compliance action against ABLV

The U.S. Treasury this week announced plans to drop its heaviest hammer on ABLV, a Latvian bank accused by Treasury of laundering billions of dollars in illicit proceeds. The proposed rulemaking of a 311 notice means that U.S. banks can no longer conduct business with the named institution.

U.S. Treasury officials assert that ABLV provided illegal banking to companies involved in North Korea’s missile program and to sanctioned and illicit individuals and firms in eastern Europe and central Asia. U.S. officials believe the bank laundered billions through shell accounts created to move mass sums gained from political corruption and other crimes into the global financial system.

FinCEN’s press release further details the allegations: “ABLV has institutionalized money laundering as a pillar of the bank’s business practices. 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.”

According to FinCEN, “ABLV’s failure to implement, and disregard for, effective AML/CFT and sanctions policies and procedures have made the bank attractive to a range of illicit actors engaged in organized crime, weapons proliferation, corruption, and sanctions evasion.  Illicit financial activity at the bank includes transactions for parties connected to UN-designated entities, some of which are involved in North Korea’s procurement or export of ballistic missiles.  In addition, ABLV has facilitated transactions for corrupt politically exposed persons and has funneled billions of dollars in public corruption and asset stripping proceeds through shell company accounts.  ABLV failed to mitigate the risk stemming from these accounts, which involved large-scale illicit activity connected to Azerbaijan, Russia, and Ukraine.”

The Wall Street Journal describes various high-risk customers of the bank and describes how the bank has sought to cater almost exclusively to customers that its own AML rating system rates as high risk.

ABLV issued a response to the Treasury accusations and says that it will work with U.S. authorities to prove that its AML Compliance program meets all requirements and that the accusations are inaccurate and the Treasury action unwarranted.


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