Banks, EU – Baltic States, Financial Services, Latvia, Legislation, USA

In implementation of the instructions from the European Central Bank (ECB), the regulator at an extraordinary meeting on February 18 decided to introduce temporary restrictions on payments by ABLV, ordering the bank to stop execution of payment orders and debit transactions in the customer accounts in any currency as of February 19.

Payments have been ceased as of midnight, and these payment restrictions will apply until further notice from the regulator.

Peters Putnins, the chairman of the Finance and Capital Market Commission, said the regulator made the decision based on the ECB instructions and will continue cooperating with the ECB in further supervision of ABLV Bank. The Finance and Capital Market Commission has sent a group of trustees to work at ABLV Bank for monitoring and liaison purposes.

The ECB said that the decision was necessary to give ABLV Bank time to take steps to towards stabilization of the situation.

As reported, the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of Treasury has proposed sanctions against ABLV Bank for its role in money laundering schemes that have been facilitating transactions for parties connected to North Korea's nuclear program and illegal activities in Azerbaijan, Russia and Ukraine.

FinCEN also said in its report that the management of ABLV Bank used bribery to influence Latvian officials when challenging enforcement actions and perceived threats to their high-risk business.

ABLV Bank said that the FinCEN report is the department's proposal which can be objected to within 60 days and they hoped to persuade FinCEN to revise its proposal. "The bank will make every effort to disprove the allegations," ABLV Bank said.

At the end of September 2017, ABLV Bank was the third 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.

ABLV Bank's bonds are quoted on the Nasdaq Riga Bond List. ABLV Bank is under direct supervision of the European Central Bank (ECB).