The bank provided money laundering services and violated the sanctions regime against North Korea, the US Treasury said. Doubtful services "for billions of dollars" were used by Ukrainian officials and runaway businessmen.
Reported to the US Treasury, the Financial Crimes Supervisory Network (FinCEN) suggested that the department include Latvian ABLV in the list of banks suspected of money laundering. FinCEN, having analyzed the activities of the bank, came to the conclusion that the credit institution is used for money laundering. If the federal authorities agree with this position, US financial institutions will not be able to open or service correspondent or creditor accounts of ABLV.
FinCEN concluded (.pdf) that "the management, shareholders and employees of ABLV have institutionalized money laundering as the core business of the bank." Because of this, many used the bank for illegal financial activities, including transactions with structures against which US and UN sanctions were imposed, in particular those related to the missile program of North Korea (among them - the DPRK foreign trade bank, Koryo Bank, Korea Mining and Development Trading Corporation). The bank continued to carry out transactions related to Pyongyang, even after the summer of 2017 announced a zero tolerance for operations with the DPRK, the document stresses.
During the 2017 year, management and management of ABLV "used bribes to Latvian officials" to influence decisions that posed a threat to the business of the credit institution, FinCEN believes.
In 2014, ABLV was implicated in the illegal withdrawal of assets by more than $ 1 billion from three Moldovan banks, BC Unibank SA, Banca Sociala SA and Banca de Economii SA, the report said. Attackers gained control over the three banks through an opaque ownership structure, partly financed by loans from offshore structures that were serviced by ABLV.
The bank also developed a scheme that allowed customers to bypass foreign exchange control. The bank masqueraded illegal currency transactions, using forged documents and accounts of front companies, the report said.
Also, ABLV "inadequately" conducted KYC procedures (know-your-customer, "know your customer", studying documents provided by a natural or legal person) and CDD (customer due diligence, complex examination of clients), FinCEN stated. As an example, the authors provide information that "ABLV received a significant amount from a bank located in Russia in a manner that indicates an illegal transfer of assets." "FinCEN believes that ABLV should have known that front companies receiving funds from a Russian bank on their ABLV accounts were connected with the ultimate beneficiaries of this Russian bank," the report said.
ABLV stated that after a "preliminary study" of the proposal, FinCEN concluded that "the proposal uses unreasonable and misleading information". "ABLV Bank stresses that the prepared report is just an offer to the Ministry of Finance, objections to which can be provided within 60 days," the bank said, noting that they are preparing an objection. The Bank intends "to do everything possible to refute this outrageous slanderous information."
In 2014, Ukrainian businessman Sergei Kurchenko (moved to Russia, from 2015 year under US sanctions) "smuggled billions of dollars through accounts of his front companies in ABLV." At least nine accounts related to Kurchenko were opened in the bank, FinCEN representatives state. The document also talks about the signs of illegal financial activities related to Azerbaijan.
None of the measures aimed at preventing such cases in the future will not ensure the security of the US financial system, FinCEN said. Its financial risks associated with the actions of ABLV, will be able to protect only the sanctions, the authors concluded.
ABLV Bank was previously mentioned in the investigations of journalists OCCRP (Center for the Study of Corruption and Organized Crime, the organization, together with the International Consortium of Investigative Journalists, prepared publications on the "Panama archive"). In October 2016 OCCRP wrote that the son of the Ukrainian official Yury Tereshchenko Alexander bought the property "in walking distance from the buildings of the parliament", one of the payments came from a registered in Seychelles company Berly Trade Ltd., which had an account with ABLV, "the leading offshore Bank of Latvia ".
Doubtful operations through companies that had accounts in ABLV, conducted by the former first deputy prosecutor general of Ukraine Nikolai Gerasimyuk. The OCCRP claimed that he sent gray money to Europe and bought real estate on them, and also paid for his daughter's education and living in the UK. Moreover, they stressed in OCCRP, these were not just personal funds of Gerasimyuk, but bribes, which he received to stop the persecution of supporters of Yanukovych.
The front companies, through which these operations were conducted, were called in the OCCRP by the word ploshchadka.
ABLV was established in 1993 year, its head office is located in Riga. The largest shareholders are Oleg Fil and Ernest Bernis. According to the results of the 2016 year, the size of the bank's assets was estimated at € 3,8 billion, it received a net profit of € 79,3 million. "Today, ABLV Bank AS is the largest independent private bank in Latvia with offices in many CIS countries," says the website of the credit institution .