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Monday 16.01.2017 | Name days: Lida, Lidija
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Charges raised against Rietumu Bank in money laundering case in France

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUCharges have been raised against Rietumu Bank and its governor, Aleksandr Pankov, in the massive criminal case regarding money laundering in France, as reported by De Facto programme of LTV. The main figure accused in this criminal case is the former head of France Offshore Nadav Bensoussan, who is called the King of Offshores in France.

The so-called Panama documents show that he was among Mossack Fonseca’s clients that had frequently used Rietumu Bank’s services.

Five years ago, a documentary was produced with an ironic title ‘We are all going to tax paradise’. This film followed Nadav Bensoussan’s path during his visit to Riga. The film showed Bensoussan demonstrating France Offshore’s advertisement stand at Riga Airport. After that, he visited the company’s local office in Old Riga. His next stop was Rietumu Bank’s main building on Vesetas Street. There he met with the bank’s Vice-Governor Ruslan Stecjuk.

Rietumu Bank no longer wishes to speak of any cooperation with France Offshore. The only response received from the bank’s press-secretary Eleonora Gailiša in regards to additional questions sent by email was: «Please explain which part of ‘Rietumu Bank will not provide any additional comments and replies’ you did not understand?»

The first news about Rietumu Bank’s ties to Bensoussan first appeared at the end of 2012. The media had reported that an employee of some Latvian bank’s representation in France had been arrested as part of the investigation France Offshore’s possible tax avoidance activities. The name of the Latvian bank was not revealed at the time. Nevertheless, it was clear that it was Rietumu Bank’s office in France.

Now it is known that the interrogated employee was the head of Rietumu Bank’s office in Paris Sergei Schuka. His name was mentioned by De Facto in its last week’s edition in regards to Panama documents. The leaked documents show that Nadav Bensoussan had provided instructions to Mossack Fonseca, specifically to the company’s Riga office manager Teo de Regibus, in 2007. Those instructions stated that the offshore company’s documents were to be sent to Rietumu Bank’s in Riga via courier service. Schuka’s name was mentioned on the envelope.

The investigation in France is now over – the case has been submitted to the prosecutor. Soon the final charges will become known. The case may be submitted to court at the end of the year. There are at least fifteen accused people in this case. Some of them are from Latvia, as French National Financial Crimes Deputy Prosecutor Ulrika Delaunay-Weiss told De Facto: «The judge has raised charges against Rietumu Bank, as well as Mr. Pankov, who is the bank’s governor in Latvia.»

Chairman of the Board of Rietumu Bank Aleksandr Pankov has appealed the charges raised against him in France’s Supreme Court of Justice – French legislation allows that. Rietumu Bank had previously appealed another procedural decision, but the plea was declined in the end. This meant paying EUR 20 million as bail. The bank did not carry out the payment. It was the reason why Pankov earned one of two accusations in 2014. «The first breach was the bank’s failure to exact the payment of EUR 20 million as bail. The second breach was the vice-president’s assistance in money laundering activities,» – said prosecutor Delaunay-Weiss.

The prosecution believes Nadav Bensoussan formed a group to help French residents to launder money using offshore companies. It happened in the period of 2006-2012. One of the banks that serviced offshore accounts was Rietumu Bank. The prosecutor did not mention any exact amounts of money processed by the group. Nevertheless, the French media had previously mentioned an amount somewhere around EUR 700 million and several hundred accounts. According to the prosecutor, it looks like Bensoussan has had a special partnership with Rietumu Bank.

Was the bank aware that Bensoussan’s actions were illegal? «This is the position of the investigative judge. This is why charges have been raised against the bank. He believes that the bank and certain officials were aware that the entire affair was one big money laundering scheme,» – added the prosecutor.

As soon as news about the investigation in Paris first surfaced, the Finance and Capital Market Commission announced its own investigation. Results of this investigation remain unknown, however. FCMC refuses to reveal them. It is also unknown, whether the penalties applied to Rietumu Bank in the last several years were related to France Offshore case.

When asked about the France Offshore Case, FCMC Council member Gvido Romeiko said: «We know a conflict exists. We currently maintain discussions with the bank. We see that one side has certain arguments. We also understand that the French investigative institution also has arguments in this case. We cannot say which side will win.»

It should be added that Rietumu Bank is also active on the securities market. At the end of 2012, the bank mentioned in its announcement in the exchange system: «Rietumu Bank has not received any complaints or criticisms from French law enforcement institutions as of yet. An employee of the bank has been interrogated as part of an ongoing investigation.»

There were no news about France Offshore from Rietumu Bank after that – nothing about any charges against the bank, nothing about the EUR 20 million bail or even the criticisms addressed to the chairman of the board. Did this not breach requirements listed in the Financial Instruments Market Law in regards to informing the exchange? FCMC monitors this field, as well. However, FCMC council member Yelena Lebedeva failed to provide a clear answer to this question: «There is one quantitative criterion for notable events – ten per cent of the bank or the issuer’s own equity. In this case, all amounts are smaller. With that, it is not possible to tell from the law’s viewpoint as to what should be reported. All conditions should be assessed in this case.»

FCMC council members also categorically deny that the treatment of Rietumu Bank is mild in comparison with smaller credit institutions. The commission also adds that it is an autonomous body. With that, there can be no political influence over it.

The ties of Rietumu Bank with politicians are clearly detailed on the website of the Corruption Prevention and Combating Bureau. The bank’s co-owners and hired employees have been regularly donating money to political parties for years.

Rietumu Bank’s Governor Aleksandr Pankov was also a member of the council of Latvian Commercial Banks Association at one point. He left this post after Rietumu Bank announced its decision to leave the association. The organization admits – they have heard of the problems in France. Nevertheless, no one in the organization had asked Rietumu Bank to leave.

«Any actions related to criminal actions or other activities create risks for the reputation for any institutions and individuals involved, as well as the industry in general,» – admits LKA public relations specialist Baiba Melnace. She adds that the situation is the same in any other industry; it is not specific only for the banking sector.

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