Latviski English По-русски
Monday 18.12.2017 | Name days: Klinta, Kristaps, Kristofers, Krists

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

(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.


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

Week in Lithuania. Lithuanian doctors to offer voluntary test on alcohol habits

Lithuania's Health Minister Aurelijus Veryga has drafted a new scheme for residents attending health care institutions to fill out tests that would reveal whether the person's drinking habits signal a possible addiction.

Citadele Index: businessmen are more optimistic about economic growth

After a four-year gap, optimism has been noticed in all of Latvia’s business sectors. For the third consecutive quarter Citadele Index value exceeds 50 points. Businessmen are also positive about the country’s economy and their own finances, according to the final Citadele Index study for 2017.

Bank of Latvia increases GDP growth outlook to 4.7% for 2017

Bank of Latvia has decided in increase gross domestic product growth outlook from 4.2% to 4.7% for 2017, as reported by the bank’s governor Ilmārs Rimšēvičs.

Latvian residents’ opinion of government’s work remains negative

Latvian residents voiced the biggest degree of dissatisfaction about the development of the situation in Latvia and the work performed by the government. Although the previous evaluation of government’s work had increased by four points, it has since declined by two points, according to data from Baltic International Bank’s Latvian Barometer.

Eel fishing to be restricted in Baltic Sea for three months

European Union Fisheries Council has decided to restrict eel fishing for three months in 2018 in all waters, including the Baltic Sea. Although the World Wide Fund for Nature and environmental organization in Europe view it as a notable first step, these efforts are unlikely to have a major impact on the most important problem – eel population continues declining rapidly, as noted by WWF.

LCCI: increase of electricity bills for thousands of companies in unacceptable

Latvian Chamber of Commerce and Industry (LCCI) categorically opposes increasing electricity bills for the majority of small and medium-sized companies due to mandatory procurement component’s differentiation. The organization believes that this would basically introduce a new additional tax, making them even less competitive.

Head of Latvian Association of Regions to spend Christmas thinking on remaining in the party

Dissatisfied with multiple decisions made by Latvian Association of Regions (LAR), Riga City Council member Mārtiņš Bondars will spend the holiday thinking about his place in this political party, as he mentioned in his interview to Rīta panorama or LTV.

Estonian fund permitted to purchase several Latvia energy production companies

Latvian Competition Council has permitted Estonian fund to purchase several energy production and agricultural companies.

Meat processing giant sees room for growth in ready-to-eat foods

Consumption in the meat market segment of ready-to-eat foods is growing quickly, evaluated Finnish meat processing group HKScan that is planning to invest eight million euros in its factory in Estonia.

To fight for national minority schools, Russian representatives promise to hold a referendum

Defenders of Russian schools in Latvia promise to organize a referendum for autonomy of national minority schools, said co-chairman of Latvian Russians Association Miroslavs Mitrofanovs in regards to the transition to education only in Latvian language.

Tax payment process from capital growth to change in Latvia

As part of the tax reform, changes will be added to the Personal Income Tax Law starting from 1 January 2018. One of the changes is associated with payment and declaration of income from capital growth. The tax rate and the term for submission of declarations on income from capital growth will change next year.

Tusk deems EU migrant quotas ineffective as some states oppose taking in migrants

Donald Tusk, the head of the Council of the European Union and chairman of this week's EU summit, has evaluated that mandatory EU-wide quotas are ineffective and that there is a split between east and west as regards asylum policy.

Riga City Council’s 2018 budget – poorly planned or well-developed?

As the vote for the 2018 budget of Riga City Council draws near, representatives of all opposition parties say they will not support it as long as politicians of the ruling coalition continue viewing the city’s most important financial document as good and aimed at development.

Euro area economy has grown quicker than expected, European Central Bank estimated

Growth has been at a faster pace in the eurozone prompting the European Central Bank to raise its economic growth forecasts.

Weekends in Latvia expected to be snowy

A layer of snow will form in Latvia’s central and western regions that will remain until the middle of next week, as reported by State Environment, Geology and Meteorology Centre.

Opinion: Latvia at risk of restricting healthcare to 300,000 people

Kustība Par! political party has sent a letter to Latvia’s President Raimonds Vējonis, asking him to return to the Saeima the recently approved law on healthcare funding legislative draft. According to the party, the law restricts healthcare for 300,000 people in Latvia.

Lithuania’s 2018 budget focuses on spending cuts, NATO commitment and social security

Lithuania's 2018 budget, approved this week by the Seimas, Lithuanian Parliament, makes history for being the first budget ever with fewer spending for the governmental sector, the commitment to NATO of earmarking 2 per cent of the gross domestic product to defence and bigger allotments for social security. The budget was adopted by 84 MPs, 29 voted against, with 15 abstentions.

EU member states have to strengthen measures against sexual abuse of children

Member states of the European Union have to take more serious measures and cooperate more intensely with Europol and information technology industry to better combat sexual abuse of children, as noted by members of the European Parliament.

Latvian parliament views initiative for changing VAT rate for food product

On Thursday, 14 December, Latvia’s Saeima made its decision on the collective application that proposes reducing VAT on everyday healthy food products and increasing VAT on unhealthy products.

Maxima: residents have become more conservative in their choice of products

In Q2 and Q3, a higher degree of conservatism was noticed in residents’ choice of products. The number of buyers who gladly purchase new products has declined, whereas the number of buyers who do not change anything in their purchasing habits has increased, according to results of a study performed by Maxima.

Civil processes to be sped up and simplified in Latvia

On Thursday, 14 December, Saeima supported amendments to the Civil Process Law in the final reading. Amendments propose several major changes to the process of review of civil processes to make court sessions quicker and more efficient.

State Auditor dissatisfied with parliament’s slow legislative process

Latvian State Auditor Elita Krūmiņa plans to inquire to the Saeima about the delay with the approval of the legislative draft on the expansion of authority of her institution, as she mentioned in an interview to Rīta panorama programme of LTV.

Aldaris commences exports to France, China and Netherlands

Aldaris concludes 2017 with three new export contracts, commencing exports of products to China, France and Netherlands. Until now Aldaris has exported products to eight markets, with the largest one being United Kingdom, taking up 78.71% from Aldaris export volume, as reported by the company.

Estonian budget passed with 0.25 billion-euro deficit

The Estonian Riigikogu with 55 votes against 41 has passed the country’s 2018 state budget bill planning to spend by 0.25 billion more than it is planned to earn.

AFSAL: loan requests in non-banking industry are declined in 69% of all cases

In the first six months of 2017 Alternative Financial Services Association of Latvia (AFSAL) issued a total amount of EUR 84.7 million in consumer loans. No increase is noted in this amount when compared with the same period of 2016. Increase did not exceed 0.2%, as reported by the association.

When do you go shoping for Christmas gifts?

View Results

Loading ... Loading ...

Polls Archive

Category feed: Feed: