Missiles, money laundering, death threats: 3 keys to understanding the gigantic financial scandal in Latvia, which confronts the US, North Korea and Russia

Missiles, money laundering, death threats: 3 keys to understanding the gigantic financial scandal in Latvia, which confronts the US, North Korea and Russia

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A bank declared bankrupt, the governor of the Central Bank arrested, accusations of money laundering and alleged links of corruption with North Korea and Russia.

That was the nightmare that fell on Latvia after the United States directed all its artillery against the banking system of that country.

In the last two weeks, Latvia – the small but strategically important former Soviet republic – has been the scene of a saga that includes so many characters as accusations, and that confronts the interests of Washington, Moscow and Pyongyang.

The public scandal began when the US Treasury Department accused Latvian bank ABLV of laundering money.

Soon, the European Central Bank froze payments to ABLV to prevent a “massive outflow of funds”. Blocked and without more options for survival, the entity finally declared bankruptcy.

In a separate case, the Anti-Corruption Agency of Latvia detained for alleged bribes the governor of the Central Bank, Ilmars Rimsevics, who denied the charges and said he feared for his life .

And as if that were not enough, the defense minister of Latvia denounced that there was a “misinformation campaign” orchestrated from abroad.

Russia and North Korea have remained silent, as doubts grow about the possible fall of other Latvian banks.

These are some of the keys that can help to understand how this political-financial web is developing .

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First key

The accusation of the United States

The United States Financial Crimes Network (FinCEN), which reports to the Treasury Department, accused Latvia’s third largest private bank, ABLV, of having “institutionalized money laundering” as a pillar of its business practices.

Kim Jong-un
Copyright of the GETTY IMAGES imageImage caption TheUnited States says it will pursue banks laundering money from North Korea or Russia.

In the same document, the government said that “poor practices in banks encourage a wide range of illicit behavior, including activity linked to the North Korean arms program and corruption related to Russia and Ukraine.”

“FinCEN is committed to protecting the financial system of the United States from this type of risk,” he adds.

There the avalanche began. Washington blocked the financial institution and so did the European Central Bank to declare it “unfeasible.” The declaration of bankruptcy was the next step and in that way ABLV was buried.

Due to the opacity with which he carried out his transactions, it is practically impossible to trace the precise origin of the funds that the bank handled, an extended practice in Latvia, whose financial system has been questioned for a long time.

Vladimir Putin
Copyright of the GETTY IMAGES imageImage caption Russia, which has close ties with Latvia, remains silent.

“In Latvia, there is a banking culture based on the idea of serving non-resident clients from the East and the West ,” said Aldis Austers, a researcher at the Institute of Social Security . “This idea was based on the slogan ‘We are closer than Switzerland ‘. International Affairs of Latvia, in conversation with BBC World.

“The amount of illegal money transactions through these banks has reached a cosmic scale.”

Latvia, one of the three Baltic nations that gained independence after the collapse of the Soviet Union in 1991, has a long history of accusations of its alleged role as a “paradise” for Russian money laundering, according to US and European authorities.

In Latvia he denies accusations and claim to be victims of an international campaign against him .

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Second key

Corrupt governor or victim of a plot?

While the fall of the ABLV bank was developing, another scandal hit the Baltic country: the country’s anti-corruption agency arrested the governor of the Central Bank of Latvia, Ilmars Rimsevics, a member as well as the Governing Council of the European Central Bank.

The country’s top monetary authority, accused of demanding bribes from local banks, was questioned by Latvian agents of the Office for the Prevention and Fight against Corruption (KNAB) and subsequently released after bail was paid.

As soon as he had the opportunity, Rimsevics defended his innocence. He categorically denied claiming bribes and blamed several Latvian banks for trying to get him out of his job.

“I have become the target of banks that want to destroy the reputation of Latvia,” said the governor.

Rimsevics
Copyright of the GETTY IMAGES imageImage caption Rimsevics says he fears for his life.

According to his version, financial institutions blame him for receiving bribes for having promoted investigations of the anti-corruption agency against them. And the undercover goal is basically to bring about his downfall to replace him with another more accommodating banker.

“I have received death threats and I have reported them to the security forces,” said Rimsevics, who, in the midst of the scandal, was suspended from his duties.

Some analysts have said that the two cases (of the bank and the Latvian governor) put on the table the question on if the former Soviet republics should be members of the euro zone.

“The double scandal will damage the reputation of the regulatory institutions of the country and its financial sector,” says Otilia Dhand, vice president of intelligence analysis consultancy Teneo Intelligence.

This situation, “will probably make banks that work with non-residents seek to adopt more conventional business models.”

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Third key

The alleged “operation to misinform”

Although the Prime Minister of Latvia, Maris Kucinskis, defended the role of the anti-corruption agency in the arrest of the governor, other members of the Executive have been added to the conspiracy theories surrounding the case.

The defense ministry, Raimonds Bergmanis, said in a public document that the accusations against Rimsevics would be a foreign operation.

Maris Kucinskis
Copyright of the GETTY IMAGES imageImage caption The Latvian prime minister, Maris Kucinskis, supported the investigation against the governor of the Central Bank of his country.

“There is a high probability that a massive information operation is being carried out from abroad, which is identical – in its structure and execution – to the communication operations that were observed in France, Germany and the United States, before the elections. ”

The statement cites as an example of this alleged operation to misinform, a series of news published on different internet portals that usually do not generate information from the economic sphere or have never published about Latvia in their portals.

“This method allows to multiply the news in a short time and guarantees visibility in the search engines”.

The elections in Latvia are scheduled for October .

“I think all this is more related to national security, rather than banking security,” Anders Aslund, a member of the Atlantic Council analysis center based in Washington.

“It is not clear who is the real actor behind this,” add

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