Baltic States – CIS, Estonia, Financial Services, Latvia, Legislation

Trasta komercbanka confirmed that on December 17, officers of the Economic Crimes Department of the Latvian State Police detained two bank employees and searched their offices.

The bank's management has decided to launch an internal probe, and both employees have been suspended from their positions for the time of investigation.

The two employees were detained in suspicion of laundering EUR 13,000 or RUB 1 million, the bank's spokeswoman Elina Bikulca told LETA.

Trasta komercbanka said it will carefully revise all documents that are directly or indirectly related with the transaction and suspicions on actions of the bank's employees.

The bank announced that these events have not affected the bank's operations and Trasta komercbanka is working as usual.

The Economic Police informed last week that two employees of a commercial bank were detained on suspicions of money laundering.

A criminal proceeding has been started against two bank employees, born in 1974 and 1985, over large-scale money laundering, and pre-trial investigation continues. Such a crime carries a jail term of up to 12 years.

The Latvian financial regulator, the Latvian Finance and Capital Market Commission (FKTK), is conducting an inspection at the bank to see whether the bank’s internal control system had identified the transactions carried out by the suspected employees.

Trasta komercbanka has been operating since 1989, offering services to local and foreign customers.

At the end of the third quarter of this year, Trasta komercbanka was the 13th largest bank in Latvia by assets.

According to FKTK, the bank's major shareholders are Igors Buimisters (33-50%), and Ivan Fursin (indirectly owning 20-33%).

In the first nine months of this year Trasta komercbanka reported EUR 2.44 million in loss, while the group's loss amounted to EUR 4.37 million, according to the bank's unaudited financial report.

FKTK in August issued a warning to Trasta komercbanka, including to the bank's board chairman and two board members, over deficiencies identified during an inspection regarding assessment of such material risks for the credit institution as reputational and credit risk in individual transactions.