Sunday

24th Sep 2023

Latvia fines bank over Magnitsky money laundering

  • Riga is going after banks laundering money from Russian criminals (Photo: PnP!)

Latvia's Financial and Capital Market Commission on Tuesday (18 June) said it has imposed a fine of 100,000 lats (€142,543) - the maximum fine under Latvian law - on a bank involved in laundering over €170 million stolen from the Russian government.

The name of the bank was not made public.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

The money laundering scheme was revealed by Sergei Magnitsky, a lawyer who worked for Hermitage Capital Management, an investment fund specialising in Russian assets.

He died in a Russian jail in 2009 after being beaten and denied medical care.

Hermitage filed a complaint in July 2012 to Latvian authorities naming six Latvian banks that allegedly laundered funds from the illegal tax refund exposed by Magnitsky.

The Magnitsky case has caused international uproar, with the US in April imposing a travel ban on 18 Russian officials linked to the affair.

Latvia is due to adopt the euro in January 2014 and is under increased pressure from the EU to clean up its act on money laundering, especially as Russian capital may have moved from bailed-out Cyprus to the former Soviet republic.

Around half of the €17 billion deposited in Latvian banks is owned by foreigners.

The International Monetary Fund estimates that up to 90 percent of those funds come from former Soviet states.

The Magnitsky money laundering trail also involves banks in Austria, Cyprus, Estonia, Finland and Lithuania, shelf firms registered in the UK and in its overseas protectorates and banks in Moldova and Switzerland.

EU officials are helping the six EU countries involved to share information in the European Commission's Financial Intelligence Unit.

A commission source said preliminary results from the joint work are expected in late June or in July.

But Austria and Finland have already said their banks did nothing wrong.

Meanwhile, Moldova - a central transit point for the stolen funds - is dragging its heels on the case.

Fifa scandal spotlights Russia

Campaigners for tougher sanctions on Russia are saying it should lose the 2018 football World Cup if US or Swiss sleuths uncover corruption.

Pro-Western government wins Latvia elections

Latvia’s main Russia-friendly party scored worse than in previous elections and is likely to stay out of government, amid concerns over Russia's war on Ukraine.

Latest News

  1. Europe's energy strategy: A tale of competing priorities
  2. Why Greek state workers are protesting new labour law
  3. Gloves off, as Polish ruling party fights for power
  4. Here's the headline of every op-ed imploring something to stop
  5. Report: Tax richest 0.5%, raise €213bn for EU coffers
  6. EU aid for Africa risks violating spending rules, Oxfam says
  7. Activists push €40bn fossil subsidies into Dutch-election spotlight
  8. Europe must Trump-proof its Ukraine arms supplies

Stakeholders' Highlights

  1. International Medical Devices Regulators Forum (IMDRF)Join regulators, industry & healthcare experts at the 24th IMDRF session, September 25-26, Berlin. Register by 20 Sept to join in person or online.
  2. UNOPSUNOPS begins works under EU-funded project to repair schools in Ukraine
  3. Georgia Ministry of Foreign AffairsGeorgia effectively prevents sanctions evasion against Russia – confirm EU, UK, USA
  4. International Medical Devices Regulators Forum (IMDRF)Join regulators & industry experts at the 24th IMDRF session- Berlin September 25-26. Register early for discounted hotel rates
  5. Nordic Council of MinistersGlobal interest in the new Nordic Nutrition Recommendations – here are the speakers for the launch
  6. Nordic Council of Ministers20 June: Launch of the new Nordic Nutrition Recommendations

Join EUobserver

Support quality EU news

Join us