Security Police investigation to decide if Latvian bankers to be put on trial

Take note – story published 6 years ago

Whether any bankers will be put to trial over sanctions-busting depends on the results of an investigation by Latvia's Security Police, Financial and Capital Markets Commission (FKTK) head Pēters Putniņš told LTV after he was grilled in a committee at the European Parliament. 

On April 26 a public hearing of the Special committee on financial crimes, tax evasion and tax avoidance (TAX3) took place in Brussels, over the risks of money laundering in the European Banking Sector. Latvia's recently-imploded ABLV Bank was also mentioned.

Asked as to why ABLV Bank problems went unnoticed in Europe, Putniņš pointed out that the US and Europe have different legislation. "In my opinion it was the past of ABLV that played a negative role in its fate," he said. He admitted that Europe has been more tolerant towards money laundering than the US.

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"The American approach has always been more aggressive. The Americans are perhaps more innovative and they're a half step ahead, which has historically been the case," he said. 

The parliament also discussed other banks, like the Maltese Pilatus Bank. Its chairman Ali Sadr Hashemi Nejad was arrested by a US court a month ago over busting sanctions against Iran. 

In the parliamentary meeting, the heads of finance authorities from several EU countries - including Putniņš - called for establishing a joint European supervisory body to combat money laundering. 

The case of ABLV is not unique, as the discussions at the European Parliament testify to that US authorities know more about European banks and money laundering through them than the local regulators do. This is both because of the fractured nature of monitoring the banks, as well as the lack of political will to combat money laundering.

"The suspicious money didn't land in Latvia from the moon. It arrived through other European banks...we haven't heard about other jurisdictions sanctioning their banks or carrying out other steps. This is food for thought...We're sure that it's high time for looking at an initiative of a joint European institution that would supervise the risk control of dirty money in the region and carry out all the necessary international operations, like FinCEN and other institutions are doing in the US," said Putniņš in the European Parliament. 

Roberts Zīle, the vice-chair of the TAX3 committee, concurred, saying that there should be a European body to monitor money laundering, arguing that steps taken by local governments amount to little because it's unknown to which banks ABLV's former clients - who might still be interested in laundering money - have moved.

"It shows that if we don't launch a joint European institution, it's a very small step if only Latvia sorts out [its supervisory system]," said Zīle. 

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