The US Treasury’s Financial Crimes Enforcement Network (FinCEN) has issued a finding and notice of proposed rulemaking, pursuant to section 311 of the USA Patriot Act, to prohibit the opening or maintaining of a correspondent account in the US for, or on behalf of, Latvia’s ABLV Bank. FinCEN proposed this action on the basis that “ABLV is a foreign bank of primary money laundering concern” and that its illicit financial activity includes “transactions for parties connected to UN-designated entities, some of which are involved in North Korea’s procurement or export of ballistic missiles”. FinCEN press release here.
In November 2017, FinCEN issued a final rule under section 311 of the USA Patriot Act to sever China’s Bank of Dandong from the US financial system for acting “as a conduit for North Korea to access the US and international financial systems” (previous blog here).
Latvia’s banking regulator has fined 3 Latvian banks, Regionala Investiciju Banka, Privatbank, and Baltikums Bank, for failing to prevent their clients from using them to circumvent sanctions on DPRK. The investigation was conducted in collaboration with the US Treasury and the FBI.
The Latvian Financial and Capital Market Commission, said in a statement that “several customers of the banks, making use of offshore companies and complicated chain transactions, transferred funds from their bank accounts to circumvent international sanctions requirements against North Korea”. Privatbank and Baltikums bank were both fined €35,575 for having weaknesses in their customer due diligence and transaction monitoring systems, Regionala was fined €570,364 and warnings were issued to its compliance team for weaknesses in its compliance systems and failing to ensure they were functioning correctly.