ABLV Bank primarily serviced international customers. The decision to determine ABLV Bank was failing or likely to fail is not expected to have a material impact on the local financial system and local customers.

As reported, the European Central Bank (ECB) on February 23, determined that ABLV Bank was failing or likely to fail in accordance with the Single Resolution Mechanism Regulation.  On 13 February, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) announced a draft measure to name ABLV Bank an institution of primary money laundering concern pursuant to Section 311 of the USA PATRIOT Act.

The Association of Latvian Commercial Banks fully supports decisive and forceful action against money laundering for the benefit of local economy and resilient financial sector. Association as the representative of Latvia's banking sector, has zero tolerance for misconduct and abuse of Latvia's banking system for illicit activities.

We are aligned with the statement made by the Ministry of Finance (MoF) that over the past years, the MoF, in collaboration with the Association of Latvian Commercial Banks, the FCMC and other institutions, has considerably strengthened the legal framework on anti-money laundering and countering terrorism financing, inter alia, ensuring the FCMC mechanisms for effective implementation of the supervisory process.

The Latvian banking sector started a significant and comprehensive improvement process in 2016 to ensure the highest standards in countering money laundering and terrorist financing as well as to facilitate sustainable development of the banking sector. The ALCB member banks fully understand the gravity of the situation and will step up their efforts in addressing the issues stemming from prior excessive risk appetite. We will continue to actively pursue significant further reduction of higher risk clients and will ensure total quality control.

In October 2017, the Council of the ALCB approved Policy Guidance and Guidelines on Anti-Money Laundering, Countering Terrorism Financing and Enforcement of Sanctions. By approving these guidelines, the Council clearly articulated the goal of achieving the highest anti-money laundering and combating the financing of terrorism (AML/CFT) compliance standards among member banks within the next 2 to 3 years.

As announced by the Treasury of the Republic of Latvia on February 22, the credit rating agency S&P Global affirmed its 'A-' long-term foreign and local currency sovereign credit ratings on the Republic of Latvia. The outlook remains positive. S&P Global made a deviation from its pre-established calendar, triggered by the statement of the U.S. Department of the Treasury related to the Latvia-based ABLV Bank and introduction of payment restrictions by the European Central Bank and the Financial and Capital Markets Commission (FCMC) of Latvia. In accordance with the S&P Global, the direct fiscal risk for Latvia in relation to ABLV Bank is modest and insignificant relative to Latvia's public finance capability. S&P Global outlines that no material negative effect on the core of the Latvian banking system - financial institutions focusing on serving resident deposits - is expected.

Sanda Liepiņa, the Chairman of the Management Board at the Association of Latvian Commercial Banks


Associate members