(BERLIN) – Three small Lithuanian banks were fined on Tuesday by their national financial watchdog authority for allegedly violating the economic sanctions imposed against North Korea as revealed by a joint investigation carried out by the Lithuanian state and the United States Federal Bureau of Investigation, a statement said.
The FBI and Lithuania’s Financial and Capital Market Commission’s revealed a tight network of companies enabling transactions on Pyongyang’s behalf which included the Baltikums Bank, the Regionala Investiciju Banka (RIB) and the Lithuanian branch of the state-owned Ukrainian Privatbank, a statement said.
The banks “had not complied with the provisions of anti-money laundering and counter terrorist financing (AML/CTF) regulatory framework” a statement said.
According to the statement, the FCMC, a public institution monitoring the financial sector, the three banks, including a Ukrainian public bank’s Lithuanian branch, will have to pay a collective 641,514-euro ($723,995) fine.
Investigators concluded that, between 2009-2015, the three banks broke Lithuania’s financing legislation and failed to thoroughly check the backgrounds of clients who used the banks within a scheme designed to evade sanctions against North Korea.
“Based in part on information provided by FBI’s Counterproliferation Center, during the period from 2009 to 2016, foreign nationals 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, including export of goods and equipment related to this program,” the FCMC’s statement said.
RIB now faces a 570,364-euro fine after the watchdog’s inspection revealed “serious defects” in the bank’s internal checks and balances methodology.
Privatbank and Baltikums will have to pay 35,575 euros each.
The FMCM president, Peteris Putnins, said these fines were calculated according to legislation in place when the financial violations were committed and that under current laws the fines would have been much higher.
According to the FCMC, which refrained from going into further details, said the banks had promised, in writing, to improve their in-house controls, especially in RIB’s case.
South Korean media informed back in 2010 that New Zealand’s authorities had blocked a sale of meat and car components to North Korea that was due to be liquidated through a “secret” bank account in Lithuania.