A Latvian bank threatened with U.S. sanctions for allegedly conducting a global money-laundering scheme, including for companies connected to North Korea’s missile program, is seeking more than a half billion dollars in government bailout money in an effort to stay afloat, The Wall Street Journal reported. The accusations against ABLV Bank by the U.S. Treasury Department have ignited one of Europe’s biggest money-laundering scandals in years and shined a spotlight on Washington’s efforts to go after Eastern European banks it says have ties to Russian money laundering.
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Latvia
Even though new insolvency administration legislature has been introduced, there's "a lot to be done" in order to avert its shortcomings, Zlata Elksniņa-Zaščirinska, head of the Foreign Investors Council in Latvia (FICIL), told Latvian Television Wednesday. The FICIL on Wednesday published an insolvency abuse report saying that even though legislature has been pushed through compliant to the requirements of the Organization for Economic Cooperation and Development, the overall situation in insolvency administration has not improved.
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Another insolvency claim has been filed against Rigas kugu buvetava (Riga Shipyard), according to information provided by Firmas.lv. The insolvency case was initiated by the Riga Northern District Court on February 20, according to information published on the Insolvency Administration's website. The claim was filed by the foreign company Nordweg Ship Repair. The court will review the case on March 5, as LETA learned from the court. Riga Shipyard CEO Janis Skvarnovics told LETA that the company has not received any documents from the court, he was therefore unable to comment on the case.
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Six years after suffering Europe’s biggest recession, Latvia is trying a controversial recipe used in some U.S. states to free people of household debt, The Wall Street Journal reported. Parliament on Thursday passed a set of laws allowing people to choose a “non-recourse” mortgage, that will allow household borrowers the option of returning the keys to the banks if they can’t pay their loans, while preventing the lender from pursuing the borrower’s other assets. The legislation was partly modeled on non-recourse mortgage laws in 11 U.S. states.
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Latvian Saeima passed amendments to the Insolvency Law in the final reading today, stipulating that the amendments will come into force on March 1, 2015, reports LETA. The government originally approved amendments to the Insolvency Law on September 25, according to which bank mortgages issued to borrowers who buy a home/apartment, and have no other domicile, will be considered non-recourse loans.
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New amendments to the Latvian insolvency legislation allowing struggling mortgage holders to mail their home keys to their lenders to get rid of their loan obligations have seriously upset banks, Latvia's Dienas Bizness daily reported on Thursday. The Association of Latvian Commercial Banks is determined to appeal to Latvian President Andris Berzins not to promulgate the amendments and to send them back to the parliament for revision, the banking association's spokeswoman Baiba Melnace told BNS.
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Ukraine's KVV Group has offered to buy Latvia's insolvent steelmaker Liepajas Metalurgs for 107 million euros ($138 million), the insolvency administrator said on Tuesday, Reuters reported. Liepajas Metalurgs, the only producer of rolled steel in the Baltic countries, filed for bankruptcy last year, blaming weak demand in Europe. The KVV Group has provided a clear plan for re-launching the plant's operations, the insolvency administrator Haralds Velmers said in a statement. KVV Group is going to pay the sum over 10 years.
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In a highly controversial move, the Justice Ministry of Latvia has scrapped former Justice Minister Janis Bordans' submitted reforms to straighten out the insolvency administrator system in Latvia, LETA was informed by Justice Ministry Parliamentary Secretary Gaidis Berzins (VL-TB/LNNK), The Baltic Course reported. Berzins added that these reforms will be put forward in a different bill in the near future. Asked whether in such a way All for Latvia!-For Fatherland and Freedom/LNNK is not attempting to delay these reforms, Berzins denied this.
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Since the insolvency of metallurgical company Liepajas metalurgs was declared this past November, EUR 1.3 million has already been spent in maintaining the company and its equipment, the company's insolvency administrator Haralds Velmers said, The Baltic Course reported. Velmers points out that most of the money went to paying electricity and gas bills, as well as paying salaries for essential personnel. ''Up until a few days ago, we were quite happy with the situation, as we were able to save a bit on our heating bill due to the unseasonably warm weather,'' he said.
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