In February 2018, the Financial Crimes Enforcement Network (FinCEN) at Treasury Department declared Latvia’s ABLV bank an “institutionalized money laundering” operation where weapons dealers and corrupt politicians from former Soviet Union countries sent their money into Europe.
Washington has watched illicit money flows channeled through European-regulated banks to the West.
The US agency accused the lender of allowing its clients with ties to North Korea anti-ballistic program to circumvent the United Nations’ sanctions. ABLV denied knowingly laundering money and later collapsed.
The FinCEN description of the work of ABLV made the lender seem more like a crime syndicate than a bank.
“ABLV management permits the bank and its employees to orchestrate and engage in money laundering schemes; solicits the high risk shell company activity that enables the bank and its customers to launder funds; maintains inadequate controls over high-risk shell company accounts,”
Furthermore, FinCEN accused ABLV of bribing Latvian officials when they felt the bank’s business practice was threatened.
Danske Bank Case
Denmark’s largest bank is investigating whether companies with ties to Russia used it to launder money, examining $150 billion in transactions that flowed through a tiny branch in Estonia, according to people familiar with the matter.
The European Commission is working on proposals that would give the European Banking Authority, the EU’s banking regulator, greater enforcement powers and more resources to investigate the activities of banks involved in illicit financing, according to senior officials.
In separate plans, the commission wants to give the European Public Prosecutor’s Office (EPPO), a recently created pan-EU agency, powers to launch investigations into the financing of terrorist activity across its member states from 2025.
State of the Union
Both initiatives, which are still being finalised, are likely to feature in European Commission president Jean-Claude Juncker’s annual “State of the Union” speech on Wednesday, and are due to be formally announced the following week.