Lithuania – prosecutors commence investigation into possible Crimean sanctions breaches

The Lithuanian Prosecutor General’s Office has announced that the Lithuanian Financial Crime Investigation Service has opened an investigation into alleged breaches of the EU’s Crimean sanctions by three different enterprises:

a) two Lithuanian companies: BT Invest, and Hanner Group OÜ; and

b) one Crimean company owned by a Lithuanian: Pluošto Linija LLC.

It is understood that the allegation relate to investments and business dealings by Lithuanian nationals in Crimean companies and property developments in breach of the EU’s sanctions against Crimea.

Latvia – two further banks fined by regulator for North Korean sanctions failings

The Latvian Finance and Capital Markets Commission has today announced a fine of €1.3 million against Norvik Banka and of €1.56 million against Rietumu Banka in relation to transactions related to circumvention of North Korean sanctions between 2013 and 2014 and 2009 and 2015 respectively.

Both banks have cooperated with the FCMC and have undertaken as part of administrative agreements to improve their internal compliance functions.

Italy – sentences for arms exports to Iran and Libya

It has been reported today that a plea deal has been reached for the final two defendants in the Italian prosecution of arms exports to Libya and Iran in breach of EU sanctions and export controls.

Mario Di Leva negotiated 3 years and 8 months of imprisonment and a fine of €8000, and for Annamaria Fontana the sentence was 3 years and 6 months and a fine of €7000.

See our earlier post for the plea deal for the first defendant.

Latvia – three banks fined by regulator for sanctions and AML failings

On June 27, 2017, the Latvian Financial and Capital Market Commission entered into administrative agreements with three different Latvian Banks for failings related to breaches of North Korean sanctions. Each of the banks cooperated with the investigations.

JSC Baltikums Bank and JSC PrivatBank were each fined €35,575 for “weaknesses in customer due diligence and transaction monitoring that led to the situation that bank had been used to circumvent international sanctions requirements imposed against North Korea”.

JSC Reģionālā investiciju Banka, was fined €570,364, for the same failings, but also for “failure to ensure effective functioning of internal control system”. To remedy this, the bank was undertaken to invest €2.8 million on “the improvement of its internal control system in 2017/2018”.

In addition official warnings were issued to those at the bank responsible for AML and CTF controls. The bank also undertook to “assess its AML/CTF internal control system and take the necessary measures to improve its functioning and effectiveness in line with the action plan, to perform external testing on the categorization of customer base and IT solutions, as well as assess the risks associated with cross-border enforcement of sanctions”.

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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