ABLV asks FinCEN to cancel sanctions

Lawyers representing Latvia’s ABLV Bank, the local Latvian bank which is currently liquidating itself in response to U.S. allegations of institutionalized money laundering, have called on the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of Treasury to cancel planned sanctions against the bank.

The bank’s lawyers say that FinCEN had made "exaggerated accusations" against the bank, and in most cases provided too general statements or did not ensure evidence of money laundering and bribery. FinCEN has ignored ABLV Bank’s performance in the program for combating financial crimes. Considering these arguments and the fact that the bank has already made a decision on voluntary liquidation, the lawyers believe that FinCEN’s proposal published on February 13 regarding ABLV Bank should be recalled.

The lawyers of international company WimerHale US office, attracted by the bank, have prepared a reply on 34 pages, including more than 170 citations of the US legislation, court verdicts, the US Congress materials, the bank’s internal documentation, the Finance and Capital Market Commission’s regulations and other documents. The letter has been signed by David Cohen, former deputy director of the US Central Intelligence Agency and supervisor of the Financial Crimes Enforcement Network (FinCEN), now a partner at the international law firm WilmerHale.

Cohen said in the letter that FinCEN has not only failed to provide sufficient proof of its accusations, but has not obtained complete information about the system for prevention of money laundering introduced by the bank. FinCEN ignored the considerable improvements the bank had made in the past few years, significantly reducing the share of non-residents in its client portfolio.

Lawyers in the letter point at alleged breaches of the Administrative Procedure Act principles committed by FinCEN. According to Lawyers, FinCEN had not ensured sufficient, comprehensive, unclassified and evidence-based information to the bank, and thus, ABLV Bank is not able to fully respond to these accusations.

Lawyers underscored that FinCEN proposal launched a process that lead to the decision of the European Central Bank to announce that ABLV Bank is a financial institution that is failing or likely to fail. This lead to the bank’s decision on voluntary liquidation. "Thus, the bank now is implementing measures in relation to its liquidation only, and does not pose or cannot pose any threat to any US financial institution, not to speak about the US financial system in general. Therefore FinCEN should recall its announcement and decision, and should stop forwarding its decision for approval," the lawyer said.

ABLV Bank in its letter also voiced a resolution to closely cooperation with FinCEN, offering any information that would be necessary for making further decisions.

Nevertheless, despite being folded the bank continues to make international headlines, as reported by LSM. Most recently, its name cropped up in a part of an ongoing journalist investigation in Malta about corruption among senior officials

As reported, shareholders of ABLV Bank at an extraordinary meeting on February 26 made a decision to start the liquidation process in order to protect interests of its clients and creditors. ABLV Bank believes that in this way it will be possible to ensure active protection of its customers, the bank said in a statement.

The Latvian financial regulator, the Finance and Capital Market Commission, acting on the instructions from the European Central Bank (ECB), ordered ABLV Bank to stop all payments as of February 19 following a report by the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of Treasury about ABLV Bank's involvement in international money laundering schemes and corruption. On February 24, the Finance and Capital Market Commission made a decision on occurrence of unavailability of deposits at ABLV Bank.

At the end of 2017, ABLV Bank was the fourth largest bank in Latvia by assets. The bank's majority shareholders Olegs Fils, Ernests Bernis and Nika Berne own, directly and indirectly, 87.03% of the bank's share capital.

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