Feb. 24 (UPI) -- The European Central Bank on Saturday announced it plans to close a Latvian bank linked to claims of money laundering involving North Korea.
The European regulator said Latvia's third-largest lender, ABLV Bank, was "failing or likely to fail" and its assets will be wound up, meaning they will liquidated, and they will be taken over by the laws of Latvia and Luxembourg, where one branch is located.
Earlier the central bank froze ABLV payments after an exodus of withdrawals. Latvia's representative on the ECB Governing Council, Ilmars Rimsevics, was released Monday after being detained on bribery allegations. Investigators are looking in whether he sought a bribe of $124,100.
More than $700 million in deposits and securities -- 18 percent of its liabilities at end-September -- were withdrawn after the U.S. Treasury described the bank's practices as "institutionalized money laundering." It added that the bank helped fund the North Korean missile program. Most of the bank's customers were shell companies registered outside Latvia, the Treasury Department said.
Although ABLV said it raised more than $1.67 billion, over four business days, the ECB said it lacked adequate cash liquidity. It referred the lender to Europe's Single Resolution Board.
"The bank is likely unable to pay its debts or other liabilities as they fall due," the ECB said in a statement on Saturday in Frankfurt, Germany. "The bank did not have sufficient funds which are immediately available to withstand stressed outflows of deposits before the payout procedure of the Latvian deposit-guarantee fund starts."
The bank said the allegations are politically motivated.
"It was absolutely sufficient for the bank to resume executing payments and meet all obligations toward its clients," ABLV said in a statement. "Yet due to political considerations the bank was not given a chance to do it."
Peters Putnins, who's also a member of the ECB's supervisory board, said officials don't anticipate tapping into nation's deposit insurance fund for payouts that must be started no later than March 7.
"Taxpayers don't have to worry: the bank itself will make these payments with its own resources," Putnins told reporters.
Deposits of as much as $123,000 are protected under Latvian and Luxembourg laws.