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Details emerge over Russian money laundering arrests

Trasta Komercbanka - which had recently featured in allegations of another, unrelated money laundering case - stepped forward today, confirming that two of its employees were the ones detained over laundering money from Russian sources, reported LETA Monday.

A press release by the bank confirmed that on December 17 the State Police Economic Crimes Unit (ENAP) detained two employees in the bank office at Palasta st. 1 and carried out searches at their workplace.

According to the employees, they were detained on suspicion of legalizing illicitly-obtained funds worth €13,000 (1m Russian Rubles). The employees have not been kept behind bars.

The bank says it has launched an internal investigation to find out what happened. The two employees have been suspended during the probe.

Trasta said that the bank's operations have not been affected.

Trasta Komercbanka has been frequently linked to various schemes, which it usually denies involvement with.

On Friday, Latvia's financial regulator, the Financial and Capital Markets Commission (FKTK) said it was pleased with the ENAP arrests with FKTK chairman Kristaps Zakulis commenting: "Only by law enforcement agencies and the banking supervisor successfully cooperating, is it possible to reduce and prevent operations related to money laundering through the Latvian financial system."

In recent years FKTK has insisted Latvia does not have a problem with money laundering and until a week ago very few penalties - and very small ones - had been handed out linked to infractions of money laundering rules.

However, as reported by LSM, the last seven days have seen a frenzy of activity in the wake of media revelations about Latvia being linked to possible multi-million euro money laundering schemes involving countries including Russia, Ukraine, Moldova, Georgia, Belarus, France, Belgium, the United States and others.

The most notorious cases in which Latvian banks are believed to have played a part include the infamous Magnitsky case in Russia, the highly irregular sale of a Ukrainian oil rig and a billion dollars that disappeared from Moldova's state coffers.

On December 11 and 14 FKTK announced record-breaking €2m fines for the Latvian arm of Ukraine's PrivatBank after it was suspected of aiding and abetting money laundering.

Zakulis was himself given an extremely rough ride on December 15 by Saeima deputies demanding action to counter the damage being done to the reputation of Latvia's banking sector and the possibility that planned OECD membership might be postponed as a result.

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