(Updates with c.bank chief's suspension)
By Gederts Gelzis
RIGA, Feb 20 (Reuters) - Latvia's central bank chief was
suspended on Tuesday pending an investigation into whether he
solicited a bribe, as corruption allegations rocked the
financial sector in the Baltic country, a euro zone member with
close ties to neighbouring Russia.
The prime minister's office said Ilmars Rimsevics had been
suspended from his role as the anti-corruption agency
investigates allegations he asked for a 100,000 euro bribe.
Rimsevics, who was held in custody over the weekend, had
earlier told a news conference he was the victim of a smear
campaign because he has been leading a drive to clean up
corruption in the banking sector. He said he would not resign.
"I have not demanded or received any bribes," Rimsevics told
the news conference. "I have become the target of some Latvian
commercial banks to destroy Latvia's reputation."
Latvia's financial system has also been rocked in recent
days by U.S. allegations that a leading bank engaged in money
laundering and helped breach North Korean sanctions.
Prime Minister Maris Kucinskis said earlier on Tuesday that
the complaint against Rimsevics was made by small Latvian lender
Norvik Bank. Its Russian owner Grigory Guselnikov had not
provided evidence of wrongdoing despite being "repeatedly
asked", he added.
Norvik Bank did not immediately respond to a request for
Kucinskis said he could not rule out that the bribery
allegations against Rimsevics, no details of which have been
given by police or the anti-corruption authority, were an
attempt to damage the reputation of Latvian authorities.
It was not immediately clear whether Rimsevics could
continue to represent Latvia on the European Central Bank's
Governing Council, which sets interest rates for the euro zone.
A Bank of Latvia spokesman said deputy governor Zoja Razmusa
would attend a non-policy ECB meeting on Wednesday.
The confusing rival claims of wrongdoing will deepen worries
about the transparency of Latvia's banking sector, which has
close financial links to former colonial master Russia.
The International Monetary Fund has repeatedly urged Latvia
to be vigilant over non-resident deposits -- mostly held for
clients in Russia and the CIS -- and strengthen the enforcement
of rules to combat terrorism funding and money laundering.
A number of small banks have been punished in recent years
over breaches of those rules.
This month, the U.S. Treasury said it was seeking to impose
sanctions on Latvia's third-biggest lender, ABLV Bank, which it
said had "institutionalized money laundering".
Norvik Bank was fined by Latvia's Financial and Capital
Market Commission (FKTK) last year for failures that allowed
clients to bust sanctions on North Korea.
European Commission Vice President Valdis Dombrovskis, a
former Latvian prime minister, warned of reputational damage
from the allegations of corruption and money-laundering.
"We are monitoring the situation closely," he said. "Of
course we see that there is damage for reputation, first and
foremost for Latvia, and we expect that the national enforcement
authorities will address the issue swiftly."
(Reporting by Gederts Gelzis; Additional reporting by Balazs
Koranyi and John O'Donnell in Frankfurt; Writing by Simon
Johnson; Editing by Catherine Evans)
First Published: 2018-02-20 14:29:19
Updated 2018-02-20 17:23:27
© 2018 Thomson Reuters. All rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. "Reuters" and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.