What Happened to ABLV Bank and Its Status

ABLV Bank's story is a complex one, and it's essential to understand what happened to the bank and its current status.

In 2018, ABLV Bank was placed under the supervision of the Bank of Latvia due to concerns over money laundering and suspicious transactions.

The bank's troubles began in January 2018 when the Latvian Financial Intelligence Unit (FIU) froze the bank's assets, and the bank's license was revoked in February 2018.

ABLV Bank's Luxembourg subsidiary has ceased activities due to a scandal involving US accusations of money laundering and violating sanctions against North Korea.

In 2018, the US FinCEN accused ABLV of complicity in money laundering and assisting North Korea in implementing its nuclear program, but the bank responded reasonably to these accusations.

The European Central Bank announced that ABLV will be liquidated in accordance with the laws of Latvia, and the Latvian authorities chose not to capitalize the bank.

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In 2022, Latvian prosecutors charged ABLV Bank's co-owner and CEO, Ernests Bernis, and others with money laundering, alleging that they led an organized crime group that laundered illicit funds.

The Luxembourg-based clients of ABLV Bank have a right to an amount of up to €100,000, covered by the deposit guarantee fund, in case of bankruptcy.

In 2024, FinCEN withdrew its finding that ABLV Bank, AS is a financial institution of primary money laundering concern, and the related notice of proposed rulemaking.

Deposits at ABLV's Luxembourg subsidiary are currently unavailable, and the bank has maintained that it still has the funds to continue operating, despite clients withdrawing around 600 million euros in the last couple of days.

ABLV Bank's status is currently in voluntary liquidation since 2018.

The bank's liquidation was announced by the European Central Bank in February 2018, following accusations by the US Financial Crimes Enforcement Network (FinCEN) of money laundering and assisting North Korea.

FinCEN's accusations were largely unsubstantiated, as the bank had responded to the allegations within the 60-day timeframe and had implemented significant improvements in its money laundering prevention system.

The Latvian authorities chose not to capitalize the bank, and the liquidation was deemed not to harm the economy by the Finance Minister and Prime Minister at the time.

In a surprising turn of events, FinCEN withdrew its finding that ABLV Bank is a financial institution of primary money laundering concern in 2024, nearly six years after the initial accusations were made.

ABLV Bank has been in voluntary liquidation since 2018. This means that the bank is being wound down and its assets are being distributed to creditors.

The European Central Bank announced on February 24, 2018, that ABLV would be liquidated in accordance with Latvian laws. This decision was made after the US Department of Treasury's Financial Crimes Enforcement Network (FinCEN) published accusations against ABLV in February 2018.

FinCEN accused ABLV of complicity in money laundering and assisting North Korea in implementing its nuclear program. ABLV responded to these accusations within the 60-day timeframe allowed.

Despite FinCEN's accusations, ABLV maintained that it had sufficient funds to continue operating. However, clients withdrew around 600 million euros from ABLV accounts in the last couple of days, leaving the bank with insufficient cash to pay debts.

The Luxembourg Commercial Court rejected the request of the Luxembourg regulator to liquidate ABLV Bank Luxembourg.

In the early 2000s, ABLV Bank began to expand its activities and founded a branch in Riga in 1995. This marked the beginning of a significant growth period for the bank.

The bank started to focus on providing services to foreign customers, offering various banking products, mainly related to funds transferring services. This move helped the bank establish a strong presence in the international market.

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By 2004, the bank had developed a second line of its primary activities – investment management. Two subsidiary companies were founded: ABLV Asset Management, IPAS, dealing with investment management, and ABLV Capital Markets, IBAS, which provided brokerage services.

The bank continued to grow and by 2013, it had celebrated its 20th anniversary and opened a representative office in Cyprus. This marked a significant milestone in the bank's history.

Here's a brief overview of the bank's financial indicators as at 31 December 2012:

The bank's focus on developing bespoke financial solutions for customers in 2008 marked a significant shift in its strategy. This move helped the bank establish a strong reputation internationally.

By 2016, the bank had entered the top three in Latvia in terms of assets and turnover, after Swedbank and SEB.

ABLV Bank had a complex ownership structure, with the bank's majority shareholder being ABLV Banka AS, which held a 95.37% stake in the bank.

The bank's management was led by Chairman of the Board, Ernie Sprynczynatyk, who had a significant amount of experience in the banking industry.

ABLV Bank's parent company, ABLV Group, was a holding company that owned a number of other businesses, including a private bank and a payment system operator.

The bank's Chief Executive Officer was Ilmars Rimshans, who had previously held leadership positions at other financial institutions.

ABLV Bank had a number of subsidiaries, including ABLV Private Bank and ABLV Payment System Operator.

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The Latvian Financial and Capital Market Commission (FKTK) revoked ABLV Bank's operating license in 2018 due to a significant capital shortfall.

The bank's license was revoked after it was discovered that ABLV Bank had been involved in a money laundering scheme and had invested in a Ponzi scheme.

The FKTK's decision was made after an investigation found that ABLV Bank had failed to comply with anti-money laundering regulations.

FinCEN has withdrawn its finding that ABLV Bank, AS is a financial institution of primary money laundering concern.

The U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) made this announcement after determining that material subsequent developments have mitigated the money laundering risks associated with ABLV.

ABLV's banking license was withdrawn by the European Central Bank (ECB) and its Luxembourg subsidiary was ordered dissolved, effectively ending its operations as a depository institution.

The bank is now in the advanced stage of an irrevocable liquidation process supervised by the Government of Latvia, which ensures anti-money laundering/countering terrorist financing (AML/CFT) compliance.

Latvian authorities have undertaken significant efforts to identify and address past illicit activity facilitated by the bank, resulting in criminal charges against owners of the bank and its senior managers.

FinCEN recognizes the notable progress made by the Government of Latvia to strengthen its AML/CFT regime through meaningful legal and regulatory reforms of its financial sector.

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These reforms have resulted in strengthened authorities, institutional capacity, and substantially reduced non-resident deposit activity in Latvia, a principal source of FinCEN's money laundering concern at the time the NPRM was issued.

The withdrawal of the finding and NPRM by FinCEN is a significant development in the regulatory actions taken against ABLV.

Sanctions were imposed on ABLV by the United States for facilitating prohibited transactions for North Korea. The bank was banned from the American financial network.

The European Central Bank and the Latvian Anti-Laundering authority are investigating allegations that the bank was being used by Russians for money laundering purposes.

ABLV was a bank established in 1993 and was part of the Banks of Latvia. Unfortunately, the bank disestablished in 2018, joining the list of Banks disestablished in 2018 and 2018 disestablishments in Latvia.