Latvia’s Financial and Capital Market Commission (FCMC) has fined two local banks for due diligence failures which allowed North Korea to procure items that facilitated its weapons programs, according to a press release issued on Friday.
The country’s financial watchdog fined Norvik Banka $1.5 million and Rietmu Banka $1.8 million for their weak due diligence and transaction monitoring. Rietmu allowed transactions to occur for five years between 2009 and 2014, while Norvik Banka’s failures came between 2013 and 2014.
“(Several) customers of those banks, making use of off-shore companies and complicated chain transactions, transferred the funds from their bank accounts, to circumvent international sanctions requirements imposed against North Korea,” the FCMC press release reads.
Both banks also admitted to the failures, with the FCMC saying it would help them “to act in line with the procedures defined in laws and regulations” in future.
The investigation was carried out with the help of the U.S. Federal Bureau of Investigation (FBI) and the Department of Treasury’s Financial Crimes Enforcement (FinCEN).
The FBI provided the FCMC with information from 2009 and 2016 concerning how foreign nationals had used “organized schemes of criminal transactions in order to circumvent the international sanctions regime concerning North Korea and its program of ballistic missiles and conventional weapons.”
The Latvian banks were used at various stages to facilitate the North’s operations, which included the export of goods to the DPRK that would help with its weapons development programmes, and allowed companies sanctioned by the UN, U.S. and EU to continue their business.
“The Trump Administration stated that it intends to address the North Korea threat indirectly, by pressuring Pyongyang’s partners and working with those who have leverage. This is evidence of Washington’s efforts behind the scenes,” Andrea Berger, a Senior Research Associate at the Middlebury Institute of International Studies told NK News.
The fines are the latest in a series of measures signaling that the Trump Administration is looking to increase pressure on North Korea and is willing to sanction companies and financial institutions working with the DPRK.
In recent months the U.S. designated entities and individuals in both Russia and China, the North’s two long standing allies, while also saying it would continue designations against Sudan’s government in part because it had not lived up to its UN mandated North Korea sanctions enforcement commitments.
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Featured Image: Stormy Riga by Alexander Annenkov on 2015-01-04 15:09:46