Teksts
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Today, the
Financial and Capital Market Commission (FCMC) and ABLV Bank, AS
entered into the administrative agreement regarding the violations
detected under the FCMC inspections, which is aimed at improving
the functioning of the bank’s internal control system. According to
the agreement, a fine of EUR 3.17 million will be applied to the
bank and warning will be given to the responsible member of the
bank’s board.
By signing the administrative agreement, the FCMC and ABLV Bank
have agreed on amicable settlement to terminate the administrative
matter initiated by the FCMC.
Determining the amount of fine to be applied, the FCMC took into
account that ABLV Bank currently complies with all regulatory
requirements and continues improvement of its internal control
system, and therefore the fine amount was set to be a minor one, i.
e., EUR 3.17 million, which corresponds to 2.5% of the bank's
total income for the year. Pursuant to the Credit Institution Law,
the FCMC may apply the fine of up to 10% of the bank’s total net
income for the previous financial year.
During the inspections, the FCMC has discovered that the bank had
not ensured appropriate extent of verification and documentation of
economic nature and legal purpose of particular clients’
transactions in previous years. The FCMC considers that the bank
had not paid sufficient attention to the client’s untypically
large, complex, or interrelated transactions and also had not
performed intense supervision of some clients’ transactions under
the enhanced due diligence.
The parties to the administrative agreement have agreed upon
further measures that the bank committed to take in full within the
set terms in order to improve the internal control system and to
strengthen its efficiency. In turn, the FCMC will monitor the
bank’s performance of assumed obligations within the terms and to
the extent set forth in the agreement.
The conclusions made by the FCMC during the inspections concern
previously executed clients’ transactions and their documentation,
however viewing those from the perspective of current more strict
criteria. In the last year, there were rapid considerable changes
in the requirements regarding provision of services to clients.
Currently, the bank fully complies with the regulatory
requirements. The number of compliance officers has been
substantially increased and the capacity of respective structural
units has been strengthened. This was also taken into account by
the FCMC when setting the amount of fine to be de minimis
applicable to credit institutions according to the law.
Unfortunately, in previous years, no sufficiently detailed
requirements for examination and documentation of the clients’
transactions were set. The bank refused cooperation with some
clients which might cause inadequate risk in terms of the current
requirements, and strong assessment of the clients is continued.
ABLV Bank will keep working on improvement of the internal control
system in accordance with the FCMC recommendations and will
allocate not less than EUR 6.5 million for this purpose. The bank’s
internal control system will be assessed and necessary measures
will be taken in order to improve the system functioning and
strengthen its efficiency.
ABLV
Bank, AS is the largest independent private bank in Latvia. The
bank’s major shareholders — Oļegs Fiļs, Ernests Bernis and Nika
Berne – directly and indirectly hold 86.25% of the bank's voting
share capital. ABLV Group includes ABLV Bank, AS; ABLV Bank
Luxembourg, S.A.; ABLV Capital Markets, IBAS; ABLV Asset
Management, IPAS; Pillar Holding Company, KS; ABLV Consulting
Services, AS; ABLV Corporate Services, SIA; New Hanza City, SIA,
and other companies. ABLV Group has representative offices in
Moscow, St. Petersburg, Vladivostok, Kiev, Odessa, Minsk, Almaty,
Baku, Tashkent, Hong Kong, and Limassol.
Ilmārs
Jargans
Head of
Public Relations Department
ABLV Bank,
AS
Tel.: +371
6777 5296
e-mail:
ilmars.jargans@ablv.com
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