European Central Bank governing council member and Bank of Latvia governor Ilmars Rimsevics has been accused of accepting bribes from shareholders of Trasta Komercbanka. This follows the closing of Latvia’s third-largest bank, ABLV, after it was accused of money laundering.
These events have cast a negative light on the country as well as the European Central Bank, which oversaw ABLV and has protested Rimsevics’s removal from his post. Latvian state prosecutor Viorika Jirgena stated that Rimsevic began taking bribes in 2010, when shareholders of struggling bank Trasta Komercbanka paid for his vacation to Kamchatka, in return for his aiding them with responses to questions posed by the country’s bank regulator. Two years later, the shareholders needed Rimsevics’s influence within this agency, known as the Financial and Capital Market Commission (FCMC), in order to prevent Trasta Komercbanka from closing. Jirgena said that they paid him half of 500,000 euros in advance, with the other half following a favorable decision by the FCMC. However, Rimsevics was unable to prevent the FCMC from accusing the bank of money laundering, resulting in its closing in 2016.
While his position as central bank governor grants him the power to suggest a head for the FCMC, as well as attend its meetings, a spokesperson for the agency stated that he could not have influenced the decision regarding Trasta Komercbanka, because “the FCMC performs its work as an autonomous public institution and adopts its decisions independently.”
The failed bank’s shareholders refused to pay Rimsevics his second installment, and instead willingly provided evidence of the bribe to anti-corruption investigators in order to avoid prosecution. Rimsevics claims that these accusations had been conjured up by banks that were displeased with his attempts to increase transparency in offshore banking.
In February 2018, the U.S. Department of Treasury issued a Section 311 action under the USA Patriot Act against ABLV for its failure to implement proper AML/CFT systems. The IELR article on the action can be found here.