Questions and Answers

What is the main objective of voluntary liquidation?

The objective of voluntary liquidation is to satisfy claims and protect interests of all creditors of ABLV Bank, AS in liquidation (hereinafter – the Company). Voluntary liquidation entails different measures to ensure that the Company can fulfil its liabilities to creditors to full extent, provided there are no legal obstacles to that, as both at the commencement of liquidation and now assets of the Company exceed its liabilities. Voluntary liquidation of the Company is so far the most extensive liquidation process of a company in Latvia. It is liquidation of a bank with current asset value of approximately EUR 2 billion.

How is the liquidation proceeding?

Voluntary liquidation of the Company was commenced on the grounds of the decision made by shareholders of ABLV Bank, AS at their extraordinary meeting of 26 February 2018 and the subsequent decision of the Financial and Capital Market Commission (hereinafter – the FCMC) of 12 June 2018 to officially approve the voluntary liquidation of the Company. The FCMC continues to supervise the liquidation by paying particular attention to the process of creditor compliance review.

What is the estimated term of voluntary liquidation?

As the voluntary liquidation entails fulfilment of a number of complex measures and legal requirements, creditors could receive their funds within 5 years.

How to file a creditor’s claim?

Creditor’s claim can be filed by filling out an application form for individuals or legal entities available at www.ablv.com, or submitting an application that is drawn up in a free form and contains information requested in the application form or deemed necessary by a creditor for justification of the claim.

By filing a claim, creditor confirms that it has acquainted itself with the General Terms of Liquidation, consents to them and recognises them as binding.

What is the procedure for recognition and satisfaction of creditor’s claim?

After the claim application is accepted, all submitted documents are verified, the amount of claim is checked against the Company’s accounting records, and a decision on recognition or rejection of the claim is made. Each creditor is informed about the decision made regarding its claim.

The Credit Institution Law of the Republic of Latvia sets forth a specific order of satisfying creditor claims.

Payouts to recognised creditors are made only after creditor compliance reviews are completed, a decision to commence payments to creditors of the entire particular group of claims has been made, and there are no legal obstacles. The FCMC supervises the liquidation, including creditor compliance reviews.

More information on creditor compliance reviews is available here.

What does creditor compliance review mean?

Creditor compliance review is a set of measures approved by the FCMC and the Financial Intelligence Unit of Latvia, aimed at management of risks related to money laundering, financing of terrorism and proliferation, as well as sanction violations in the course of the liquidation of the Company.

More information on creditor compliance reviews is available here.

What does reservation of funds for payout mean?

It is a decision made by Company’s Liquidation Committee on commencing full or partial payouts to creditors of the particular group of claims, and separating (earmarking) these funds from other available funds.

When will the payouts to creditors begin?

Following the completion of first creditor compliance reviews, payouts to creditors began in October 2019.

Company’s assets amount to EUR 2 billion, which is sufficient for satisfying all creditor claims to full extent.

When will my claim be satisfied?

Payout will be made after completion of your compliance review, provided funds are earmarked for payout to all creditors in the group of claims in which your claim is included and there are no legal obstacles impeding the payout to you.

Is there any fee charged for payout to creditors?

If the beneficiary’s credit institution or payment institution is located in the Republic of Latvia, no fee is charged for the payment. In other instances, the applicable rates and charges are set forth in the pricelist.

What does freezing of assets mean, and what action should be taken?

According to the Law on the Prevention of Money Laundering and Terrorism and Proliferation Financing of the Republic of Latvia, the Financial Intelligence Unit issues an order to freeze assets if there are reasonable suspicions that a criminal offence is being committed or has been committed, including money laundering, terrorism and proliferation financing, or there has been an attempt of such criminal offence.

There may be different grounds for suspicions, e.g., the person fails to supply necessary information on the source of funds. In such instances, creditors are advised to provide the required information to the Company as soon as possible, and the Company will submit this information to the Financial Intelligence Unit of Latvia according to the procedure set forth by legislation. If the information submitted proves the lawful origin of the funds, the Financial Intelligence Unit of Latvia will revoke its order.

If the Financial Intelligence Unit of Latvia issues an order on freezing creditor’s assets, the Company informs creditor by sending a copy of the order, which contains information on how to challenge it.

Complaints regarding orders issued by the Financial Intelligence Unit of Latvia can be submitted by creditors in accordance with the procedure set forth in the order within 30 days after receiving a copy of an order.

Please note that this is not a legal advice. Upon receiving a copy of the order of the Financial Intelligence Unit, we advise you to contact a legal counsel for protection of your interests with public authorities.

What does arrest of funds mean, and what action should be taken?

The arrest of creditor’s funds is a restriction to operate with the property. It is imposed by a decision made by a person directing the proceedings, which has been approved by an investigating judge, or a court decision. Such a restriction is in effect until in the framework of criminal proceedings a decision is made to lift the arrest or until a final rule is made on actions with the arrested property.

The Criminal Procedure Law of the Republic of Latvia sets forth that property is arrested under criminal proceedings in order to ensure the recovery of procedural expenditures and compensation for harm to a victim, possible return, on the basis of ownership, of a criminally acquired property to the owner or lawful possessor, possible confiscation of a criminally acquired property, resources that a person has acquired from the disposal of such property, the yield received as a result of the use of the criminally acquired property, or property related to a criminal offence, and also possible confiscation of property as an additional punishment.

If creditor’s funds are arrested, a person directing the proceedings sends or issues a copy of a decision about the arrest of property to a creditor. A decision about the arrest of property must state the purpose of arrest, owner of arrested property, and the necessary collateral amount, if the amount of financial matters in question is known.

If criminal charges are not brought against a creditor (i.e., if creditor is not a defendant), at the moment when creditor’s property is arrested, it becomes an owner of property infringed during criminal proceedings with the respective rights and duties (see Section 1111 of the Criminal Procedure Law of the Republic of Latvia).

Please note that if according to the Criminal Procedure Law of the Republic of Latvia a person directing the proceedings has expressed an assumption that property is illegally obtained or related to a criminal offence, creditor has a right to prove the lawful origin of the property from the moment when its right to manage the property is restricted by procedural actions, including a decision on arrest of the property.

The Criminal Procedure Law of the Republic of Latvia also sets forth if a person involved in criminal proceedings claims that the property is not to be considered of criminal origin, the burden of proof lies on this person.

In such a case, creditor has to prove the lawfulness of origin of the property; therefore, creditor is advised to provide a person directing the proceedings with information and documents proving the lawful origin of the arrested property without hesitation.

Please note that this is not a legal advice. In most cases, a decision on arrest of the property is subject to appeal. Upon receiving a copy of the decision on arrest of the property, we advise you to contact a legal counsel for protection of your rights and lawful interests with public authorities.

How are the Company’s assets recovered?

Assets of the Company (loan portfolio, the Company’s securities, etc.) are being recovered in order to settle creditor claims. Asset recovery also involves measures aimed at management of risks related to money laundering, financing of terrorism and proliferation, as well as sanction violations.

The total amount of the Company’s assets (EUR 2 billion) is sufficient for satisfying all creditor claims to full extent. Updated information on recovered assets is available in Section on Financial Indicators.

Where can I obtain information on possibilities to buy assets?
Information on asset sales available in the Section on Asset Sales. In case of any questions, please contact us at offers@ablv.com.

Should I continue settling my liabilities (repay a loan) during the voluntary liquidation?

Company’s liquidation does not affect the settlement of your liabilities towards it; therefore, if you have any outstanding liabilities to the Company, please continue making payments as usual. You should continue fulfilling your liabilities to ensure that your credit history is not affected.