ABLV Submits a Letter of Response to FinCEN

Riga, Latvia, April 20, 2018, 09:07 / Banking

On Tuesday, 17 April, ABLV’s attorneys from WilmerHale law firm’s U.S. office submitted a letter to the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of the Treasury providing a response to the Notice FinCEN released on 13 February 2018. The letter is published on website www.regulations.gov. In the letter, the attorneys refer to more than 50 documents, which are provided in the attachment to this letter.

The letter states that the FinCEN’s Notice initiated a process that led to the decision of the European Central Bank to declare ABLV “failing or likely to fail.” This led ABLV to an irrevocable decision to enter voluntary liquidation. Despite that, ABLV stands ready to cooperate closely with FinCEN, and to provide it with any additional information that may be useful in the course of its deliberations.

The letter describes ABLV’s work done in risk mitigation, as well as the information about the significant improvements in the bank’s internal control systems in the field of prevention of money laundering and terrorism financing, and sanctions violations. The attorneys also point out that these improvements and the work done is especially important in the course of assessment of whether the bank causes or can cause “a primary money laundering concern” according to Section 311 of the USA PATRIOT Act.

In the response letter, ABLV attorneys also provide an opinion about FinCEN statements regarding the probable violations of North Korean sanctions under the administrative cases of 2017, Moldova’s banks, Ukrainian entrepreneur Serhiy Kurchenko and other matters mentioned in the FinCEN Notice.

Taking into account that, in the opinion of the attorneys, FinCEN has failed to take into account a list of significant circumstances, and also given that the Bank has made a decision about voluntary liquidation, there is no legal justification and no practical sense for proceeding a final rule under the FinCEN Notice, and therefore FinCEN should withdraw the Notice and the proposed rule. “We respectfully request that FinCEN should withdraw its Notice and Proposed Rule”, says attorney David S. Cohen in the letter.

In the letter, ABLV emphasises that the most surprising is FinCEN’s utterly unsupported allegation that “ABLV executives and management have used bribery to influence Latvian officials when challenging enforcement actions and perceived threats to their high-risk business”. The letter stresses it once again that ABLV categorically denies that anyone in the Bank bribed any Latvian official, stating that the allegation makes no sense on its face. Given that the bribery allegations were very concerning to the Bank’s leadership, it sent formal requests to the Latvian State Police and Office of Corruption Prevention requesting a thorough assessment and investigation into FinCEN’s claims and pledging full cooperation.