Rigensis bank fined €1m for anti-money laundering failures

Take note – story published 4 years and 11 months ago

Latvia's financial regulator, the Financial and Capital Market Commission (FKTK) on July 15 announced it was slapping Rigensis Bank with a €1 million fine "for violations of the law on money laundering and the prevention of terrorism and terrorist proliferation financing."

That's what FKTK said July 15, and the move coincided with a temporary chairwoman taking helm at the regulator.

The regulator said it had found "serious shortcomings in the Bank's internal control system" including failures to identify the true owners of accounts and failures to terminate accounts held by shell companies, a notorious part of the international money-laundering process.

In addition, Rigensis board member Renārs Degro, who has held the position of Risk Director of the bank since 2013, has been issued a warning, while the bank itself must undergo an internal audit by an independent authority, as well as revise its client database.

A banking license was issued by the Financial and Capital Markets Commission on June 20th, 2011, according to which the Bank was permitted to provide financial services as long as not less than 70 percent of its customers consisted of large corporate customers.

FKTK said it obtained the information which led to the fine during on-site inspections in February this year.

The bank was fined 80% of the maximum – equivalent to 10% of annual turnover – allowed under the law, and the fine has to be paid into the state budget within a month.

Until this point, Rigensis was unique among the banks formerly oriented towards non-resident depositors in that it had never fallen foul of the regulator. 

Rigensis Bank was founded in June 2011 by well-known Russian businessmen Igor Tsyplakov and Dmitry Sokolov under the aegis of Russia's ICT Group and ICT Holding, a Cyprus-registered entity which has major interests in rail freight, gold and coal mining and real estate as well as a holding in Credit Bank of Moscow.

Its list of correspondent banks is exclusively Russian with one exception - which is Chinese.

According to the archive of the LETA news agency, Rigensis was the ninth-largest bank in Latvia by assets in 2018 and worked with a profit of €3.504 million.

According to a non-audited public statement about the first quarter of 2019, the Rigensis boasted: "The Bank pays special attention to support and enhancement of capital adequacy and risk management system, including AML procedures, in order to comply with the world best standards."

At the end of the first quarter of this year it had assets of 266 million euros - down from 454 million a year earlier and liabilities of 195 million, down from 389 million a year ago. Rigensis' profit in the first quarter of this year was just under 1 million euros, or slightly less than the 1,028,850 fine levied by the regulator.

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