A trap for million euros. Will Ukrainian business return bank deposits from Latvia?

About the illustrative example of Latvia in the context of financial monitoring and how the banking crisis of this country has affected Ukrainian taxpayers and Ukrainian business – we suggest you read the article of the managing partner of KAC Group Volodymyr Harkusha.

The global trend – the fight against the financing of international terrorism, drug trafficking and money laundering is sometimes gaining momentum. An illustrative example is Latvia.

Against the background of the “maturity” of Latvian banks over the past ten years, one of the reasons for which was the laundering of shadow money by businesses of Eastern European origin, it is difficult to understand the logic of the further status of these funds. After all, if there is a suspicion of criminal origin of money, for example, they are withdrawn from the budget of Ukraine, and there is a victim (Ukraine) and the accused (bank client), the money must be returned to the victim and the offender punished. If this is not the case, the funds must be returned to the bank’s client. And how are things really going?

Trasta Komercbanka, ABLV, PNB – the names of these Riga banks are pleasing to the ears of many Ukrainian businessmen, whose money is still in the accounts of bankrupt banks. Characteristically, a significant part of them is in the status of “arrested”, and in accordance with Articles 124 and 126 of the Criminal Procedure Code of Latvia, firstly, there is no need to prove the specific crime as a result of these funds, and secondly, the obligation to prove the legality of the origin of the funds lies with the accused. The presumption of innocence? No, I haven’t heard.

And what about stolen money when it is proven? The Latvian court proved the theft of $ 30 million from Ukraine by Viktor Yanukovych’s entourage through the Latvian banking system, they were confiscated. Are they returned to the injured party – Ukraine? Here is a quote from the political director of the Ministry of Foreign Affairs of Latvia, Jaanis Maizheks: “At this stage, there are no changes, but we are still ready to cooperate with Ukraine.” In general, there is a lack of evidence that it was stolen. From the Ukrainian Ukrgasbank in the Kyiv court there was enough evidence to return $ 3 million from the same Cypriot companies, and in Riga $ 30 million – no.

Part of the escalation of the fight against “bad money” in the former popular Baltic “financial and settlement center”, as the Latvian banking system was called, was due to the fact that at the turn of 2019-2020 the Council of Europe Commission to assess measures to combat money laundering Moneyval was to include Latvia in the gray list of financially unreliable countries. Accordingly, high-profile demonstrations were held, a large amount of money was seized, high-profile lawsuits were launched, as a result of which Latvia avoided the gray list, although it is in the status of special supervision.

It would seem that you can exhale, calmly deal with the accumulated issues. There were some signals, for example, the head of the Fiscal Discipline Council, Inna Steinbuk, said: “It is very important that Latvia does not become a police state, although all bank customers are already considered suspects.” But the head of the Financial Intelligence Service, Ilze Znotini, probably has a different opinion. She even filed a complaint with the Latvian jury against a Riga lawyer who claimed that the “overhaul” of the financial system had gone too far and dealt a severe blow to the Latvian economy. The complaint was rejected, by the way.

How are things going with the victims of the ideological struggle for the purity of financial flows of former clients of Latvian banks – Ukrainian entrepreneurs?

The example of the victims of the bankruptcy of the Riga PNB Bank is illustrative. The bank virtually ceased to exist in September 2019. And immediately quite loudly: the administrator of the insolvent PNB banka Vigo Krastins sued for 32 million euros against the former board and board of the bank for damages to the credit institution, including former NATO Secretary General Anders Fogh Rasmussen and former head of the German intelligence service August Hanning. The Latvian Financial Intelligence Service seized dozens of accounts in the bank belonging to the companies of Ukrainian businessmen, which did not allow them to receive even a guaranteed 100 thousand euros.

Several IT companies, as the most advanced, wrote a collective letter to the then Deputy Prime Minister for European and Euro-Atlantic Integration Dmytro Kuleba asking him to look into the situation. And the situation was bad. The bank’s long-time transparent business clients, who have repeatedly undergone financial monitoring procedures at PNB Bank, were suddenly accused of money laundering and terrorist financing. Then more. Naturally, our compatriots gave the case a legal course, because it involves millions of euros: they appealed to the Prosecutor General’s Office, the Financial Intelligence Service and even the police. Continuous refusals with some variety in motivation.

The most banal:

violation of the procedural deadlines for filing an appeal (notifications were sent in writing and not quickly),

incorrect translation into the state language,

lack of documents (power of attorney, for example) when filing a lawsuit (although the power of attorney was found in the package, but the deadline for acceptance of the lawsuit is missed), etc.

Given the seriousness of the allegations (after all, the financing of international terrorism), some “suspects” offered to testify online or at the Latvian consulate in Kyiv in order to speed up the process. But for some reason this initiative was not appreciated. And Karina Maulice, a former police officer in the Northern District of Riga, who also conducted criminal cases against PNB’s clients based on their statements to the police, said in a private conversation that these cases had no prospects. The systemic red tape procedure has been launched, the deadlines for final decision-making dates have been blurred, and quarantine quarantine suggests that victims are being prepared to think that they can say goodbye to their money. And the legal substantiation of non-return of blocked funds is ready. Correspondence – bells in small handwriting appeared in the correspondence of Latvian bankrupt banks: “We would like to inform you that, according to Section 3 of the Law of the Republic of Latvia on Deposit Guarantee, the depositor loses the right to demand payment after five years from the date of unavailability of the deposit. from the date when the circumstances that caused the refusal provided for in part 1 of Article 21 of this Law occurred. ”

Of course, Ukrainian businessmen, whose money was arrested in Latvian bankrupt banks under a contrived pretext, will not let the process flow. According to the lawyers of an international law firm dealing with victims of motivated bureaucratic arbitrariness, they carefully justify and summarize all the costs and financial losses of their clients, which will certainly be presented for recovery if not in the courts of the Republic of Latvia, then in European courts exactly.

Read more:

Repeated financial monitoring. Why do banks conduct it

On loan restructuring and bankruptcy proceedings of individuals