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ECB halts payments from Latvian bank amid accusations of North Korean transactions
The European Central Bank halted payments by ABLV, one of Latvia's biggest banks, on Monday, amid accusations from the United States Treasury that the lender had been involved in money laundering and unauthorised transactions with the heavily sanctioned nation of North Korea.
The ECB said it had instructed Latvia's banking supervisor to impose a moratorium on the bank, freezing all payments by the bank on its liabilities.
"In recent days, there has been a sharp deterioration of the bank's financial position. This follows an announcement on 13 February by the US Department of the Treasury's Financial Crimes Enforcement Network from February to propose a measure naming ABLV bank an institution of primary money laundering concern pursuant to Section 311 of the USA Patriot Act," a statement issued by the ECB read.
"A moratorium was considered necessary given that the bank is working with the Latvian central bank and authorities to address the current situation," it continued.
The US Treasury alleged that the lender was guilty of practising "institutionalised money laundering," and went as far as to claim that it had found several transactions to parties linked to North Korea's ballistic missile programme, and said that money laundering had become a "pillar" of the bank's business model, something ABLV vehemently denied.
Separately, central bank governor and ECB governing council member Ilmars Rimsevics was detained for questioning by Latvian officials on Saturday; however, local media suggested Rimsevics' detainment was not linked to the ABLV accusations.