bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Wednesday 28.06.2017 | Name days: Kitija, Viesturs, Viestards
LatviaLatvia

Norvik Bank Chairman: Latvia’s involvement in money-laundering schemes will not go away

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUMore and more information keeps surfacing in the media about the involvement of Latvian banks in massive money-laundering schemes. Oliver Ronald Bramwell, chairman of the board of Norvik Bank, said in an interview to BNN that this situation is largely associated with the fact that the country is small, but its scandals are large. Because of that, those scandals remain in people’s memories a long time.

Money-laundering schemes – why does this problem remain so topical in Latvia?

I think it’s been a historical problem.  If you look back to 2015 it was recognized as big problem by the government, by the regulators and the people. I think everyone saw the scandals, historical scandals. And we can add the Magnitsky case and Moldova case to all that. Everyone was aware of this stuff.

Why has this topic become big again? Because, I believe, it is related to issues present with banks in the UK, where the some of the money laundered in Latvia ended up. The topic of money-laundering schemes has always been a focus of journalist investigations, so it popped up again in May 2017 as a big problem.  But if you look even further, this problem was already talked about a lot back in 2015.

There were very significant changes added to the law in 2016. Banks were fined considerable amounts in 2015 and 2016.

And through last year, not just Norvik, but lot of banks began working with new emblems in e-mails systems. Truth be told, analysis of America’s practice and example provided us with very good solutions to help avoid such schemes. So we trained bank employees, adapted to new changes, and I think 2016 has brought a big change to the way banks have worked in the past.

Why do EU and other organizations continue criticizing Latvia for its negligence when it comes to money laundering?

I think if you look at most of the issues raised in relation to Moldova, Ukraine and Magņinsky case, I think it becomes clear that most of them appeared in 2010, 2011 and 2012.

And if you look at 2014-2017 period, it becomes clear that lot less issues have been raised in this period of time.  What’s on people’s tongues now is that UK is blamed for being part of the Moldova case, laundering that money. What feels like happened today had actually happened five years ago.

I believe one of the banking industry’s problems is that it has always been split in two worlds – between East and West.  I think the pressure that appeared in 2014 and 2015 has changed things for the better. Some of the initial requirements have become stricter.

Fighting against money-laundering schemes, Latvian government wishes to establish even stricter rules. How will that influence your bank?

There is already influence. If we look back to last year, the majority of laws proposed then and approved this year were aimed at combating money-laundering schemes. This means the law will have changed a lot over the course of the year. Changes to the law were the key to receive approval from OECD and become a member.

It was necessary to organize training to help prevent money-laundering schemes on a domestic and international level. Everything was very open. Names of banks that were involved in money-laundering schemes were published for all to see. Many were closed down. And this is important because many banks were taught a lesson. This also applies to governments and regulators. Following the changes to the law in 2016, banks have experienced growth.

There are two ways to punish banks, and, I think, American regulators have been very aggressive in this matter lately. The first way is when regulators uncover violations in a bank, as it happened, say, with American banks or Deutsche Bank.

Unfortunately, it comes as major strike for banks – their reputation suffers because of major scandals and enormous fines, especially if those are large institutions and their value is present on stock markets. It seems to me that the fact that USA, UK, Germany and even Latvia have been involved in money-laundering schemes will not be forgotten even in spite of all the efforts put into sorting this problem by different institutions. It is part of history now, and there is no way for us to change that. People will always remember that Latvia was involved in money-laundering schemes.

UK and USA – their banks have been involved in money-laundering schemes for 20 years and more. Banks have even been involved in laundering Mexican drug money. But people forget that quickly because those are major corporations with marketing and news volumes far exceeding those in Latvia.

And this is where the issue of reputation of Latvian banks surfaces. It will be much harder for Latvian residents to forget their country’s involvement in money-laundering schemes because those scandals were large but marketing – small. Even if a bank changes its direction, this does not change the fact that the scandal remains in people’s memories for a very long time.

This autumn European Council’s Anti-Money Laundering Measures and the Financing of Terrorism Service Moneyval will arrive in Latvia. How do you think they will assess the situation of Latvian banks in relation to the money-laundering problem?

I think they will be more positive than they would have been two and a half or three years ago. The reason is that banks have performed many changes these past several years to help prevent and avoid fraudulent schemes. I think they will be more satisfied to see Latvian regulators going in the right direction and making the current system stricter than it was before. Of course, light will be shed on other problems, such as grey economy.

I would personally describe the country’s current situation more positively. As I’ve said – 2016 changed the way many banks function. Even if the government decides banks need even stricter supervision, I think it will be for the best. At the very least, Norvik Bank is not worried about that.

Ref: 224.109.109.5092


Leave a reply

  1. Walter Burke says:

    Nonsense… This ML scare is only a pretext to control each and every move of the law abiding citizens. Just like Global Warming, it’s fraud.

    Yes, there are some bad actors. Deutsche Bank was happily laundering money for their clients. Many banks did. So what? Are we going to say that all German banks are now corrupt or criminal.

    Latvia should finally stop taking orders from Berlin/Brussels and develop some spine, do something that’s good for its citizens. Just like our President just did by pulling out of the Paris Agreement.

    Thumb up 0 Thumb down 0

Lembergs fails to chair third meeting of the new Ventspils City Council; this time he «lost his voice»

Although the slogan of Ventspils is ‘City with tomorrow’, little changes in the work of the local city council – the organizational process of meetings remains absurd and incomprehensible. For example, Aivars Lembergs, who is legally prohibited from performing his duties as Chairman of Ventspils City Council but has been elected as mayor regardless, could not chair the most recent meeting of the city council. The excuse he gave was that he lost his voice.

Multi-storey building at Zolitude Tragedy site sold at an auction for 3.9 million euros

The multi-storey building located at the site of Zolitude tragedy in Riga, Priedaines Street 20, has been sold at an auction for EUR 3.9 million, according to information published at eizsoles.ta.gov.lv.

Registration of social service providers employs «silence means consent» principle

From now on administrative practice of institutions responsible for social service providers will employ a «silence means consent» principle to reduce bureaucracy. This means if service providers do not receive a response to their application from a ministry by a specific date, service providers will be well within their rights to commence providing services, explains Welfare Ministry.

Experts: Latvia either does not use advantages offered by technologies

In spite of wide technological opportunities to create a powerful digital economy, Latvia either does not know how or simply does not use those advantages. This hurts the country’s competitiveness on the global market.

Estonia pushed to ban low nutritional value products from schools

Food and drinks with a low nutritional value and rich in calories should not be sold in schools, sets forth a bill drafted by the Estonian Social Affairs Ministry and the Minister of Health and Labour.

CEOs admit – it is getting harder and harder to find new workers

Study results show that 60% of businesses admit it is getting harder and harder to find workers. This marks more complex personnel selection processes for employers, which often costs more time and money.

Opinion: consumption of dairy products in Latvia continues to decline

Consumption of dairy products continues to decline in Latvia, says Food Union Vice-President for strategy and businesses development matters Normunds Stanevics.

Russian military incidents over Baltic Sea unprofessional, not hostile, says NATO general

Aviation incidents involving Russian war planes above the Baltic Sea are not clearly hostile against NATO, but are rather unprofessional, Chairman of the NATO Military Committee Gen. Petr Pavel has evaluated.

FCMC applies fines to three Latvian banks

Finance Capital and Market Commission in cooperation with United States Federal Bureau of Investigation found out that three Latvian banks – Baltikums Bank, Privatbank and Reģionālā investīciju banka – have not complied with requirements for combating money laundering and terrorism funding.

Role of NATO forces in Latvia’s state defence to be discussed in detail

On Tuesday, 27 June, Commander of Latvian National Armed Forces Major General Leonids Kalnins will meet with Lieutenant General Manfred Hofmann, who is the NATO's Multinational Corps North-East Headquarters Commander.

After successful Italian local election, Berlusconi sets sights on returning to power

Former Italian Prime Minister Silvio Berlusconi, who has been convicted of tax fraud, has hailed the results of the large support his party has received in alliance with two other parties in the Italian local election.

LCCI decides to request a review of state expenditure

During an extraordinary meeting on Monday, 26 June, Latvian Chamber for Commerce and Industry decided to withdraw its support for the medium-term tax strategy until the government is ready to return to guidelines approved by the Cabinet of Ministers.

London outlines UK’s offer for post-Brexit stay of EU nationals

British Prime Minister Theresa May has stated she wishes for citizens of European Union member states to remain in the UK after the country leaves the bloc, outlining an offer for Brexit talks with Brussels.

Latvian ruling coalition agrees to introduce progressive PIT rate

The ruling coalition in Latvia has reached an agreement to differentiate personal income tax rate at 20%, 23% and 31%, as Prime Minister Maris Kucinskis told journalists after the coalition meeting.

Latvian Transport Ministry signs memorandum with Chinese Xinhua news agency

Transport Ministry’s State Secretary Kaspars Ozolins and Xinhua Vice-President Liu Siyang signed a memorandum on cooperation for mutual exchange of information associated with transport and logistics sector, BNN was informed by the ministry.

Opinion: Latvia is behind other countries both politically and economically

«Unfortunately, often the desire of our politicians to defend national interests is on par with that of the American president in relation to activities of Russian hackers. When two transit companies asked the government to compensate income of EUR 8.3 million lost because of the government’s stance on Ventspils Freeport’s involvement in Nord Stream 2 project, those businessmen were immediately called shameless,» Dienas Biznes journalist Egons Mudulis comments the situation with Nord Stream 2 project in Latvia.

Trial against Yanukovych suspended in Ukraine

A court in Kyiv has suspended the trial against the former President of Ukraine, Viktor Yanukovych, over state treason charges. Kyiv Obolonskiy district court, Yanukovych's lawyers opposed the petition of state prosecutor Ruslan Kravchenko on the application of special judicial proceedings in the case in the absence of Yanukovych from court.

First share trading platform opens in Baltics

The first share trading platform in Baltic States – Shareswall portal – has officially opened.

Harmony comes to power in Daugavpils

With a majority of votes, Harmony’s candidate Andrejs Elksnins was elected as chairman of Daugavpils City Council on Monday, 26 June. This means this party is now in charge of two of Latvia’s largest cities.

Week in Lithuania. Lithuanian satellite launched to space

Lituanica SAT-2, a satellite developed by scientists of the Vilnius University and NanoAvionics company, was launched to space on a rocket from India on Friday, June 23.

Employers: to increase wages, tax rise must not be allowed

«Social and cooperation partners have taken active part in the development of tax reform guidelines. Nevertheless, the ruling coalition is taking its time with making this important decision. On top of that, the ruling coalition is ignoring opinions from employers and employees,» say Latvian Employers' Confederation.

Residents of fire unsafe London blocks asked to move out

Following the tragic London fire, local authorities are asking residents of fire unsafe tower blocks to move out, despite resistance from some residents.

LOS: chopping down trees while bird eggs are still in nests is intentional murder

Estimates presented by Latvian Ornithological Society show that every year more than 50,000 bird nests are destroyed by logging every year.

37.34 million euros – costs for inter-institutional information exchange

The costs of information exchange among state institutions are estimated around EUR 37.34 million, as stated by the State Chancellery.

Entire week expected to be rainy in Latvia

This week’s weather is expected to be volatile in Latvia. Air temperature this week will not exceed +25° C, according to the forecast from the State Environment, Geology and Meteorology Centre.

Newest comments