March 27, 2018 / 12:31 PM / 4 months ago

ECB revokes licence of Estonian bank amid money laundering probe

TALLINN, March 27 (Reuters) - The European Central Bank has revoked the licence of small Estonian bank Versobank AS over failures to remedy regulatory breaches in areas such as money laundering, the Estonian financial watchdog said.

The action taken against Versobank comes as the Baltic states’ leaders prepare for a summit with U.S. President Donald Trump in Washington next week where they will be keen to showcase efforts to stamp out money laundering, a key concern for Washington in the region.

Latvia is trying to restore confidence in its financial institutions after U.S. accusations that the euro zone state’s third biggest bank, ABLV, was serving as a conduit for illicit funds. The bank, whose former management denies wrongdoing, was shut down last month.

Latvia has also moved to ban shell companies - entities often used in money laundering.

The ECB withdrew Versobank’s licence after a request from the Estonian financial watchdog.

Estonia’s watchdog, the Finantsinspektsioon, said the action against Versobank was “an isolated case” and did not affect other banks in the eurozone country.

“The withdrawal of the authorisation of Versobank AS is a clear signal that Estonia will not tolerate breaches of anti-money laundering and combating of terrorism law,” watchdog Chairman Kilvar Kessler said in a statement.

Versobank spokesman Margus Maidla said the steps against the bank had come before its new management team could fully implement a new business plan to address the concerns. Current CEO Aivo Adamson took the helm in July last year.

“We were expecting something, but we didn’t expect such a bullet as this at this time,” he said.

Deposits at Versobank, which has 5,600 clients, of which 3,600 are non-residents, amounted to 253 million euros, equal to 1.5 percent of total bank deposits in Estonia, the country’s central bank said.

ECB’s top banking supervisor Daniele Nouy faced questions on Monday about the alleged money laundering at ABLV and Malta’s Pilatus Bank. Both cases were brought to attention by U.S. authorities.

Nouy called for new EU legislation to deal with these issues, which she described as “embarrassing”.

$1 = 0.8066 euros Reporting by David Mardiste; editing by Niklas Pollard and Jane Merriman

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below