ECB’s Latvian representative detained in bribery case

The European Central Bank’s reputation is under the spotlight after one of its policymakers was detained over bribery allegation.

Ilmars Rimsevics, who represents Latvia on the ECB general council, was questioned on a charge of demanding a bribe from the country’s third largest bank, which has been caught in a separate money laundering probe.

Jekabs Straume, the head of Latvia’s anti-corruption authority, denied the two cases were linked.

“[Rimsevics’ arrest] … is about demanding a bribe of no less than €100,000,” he said.

The case against the Latvian ABLV Bank stems from claims by the US authorities that it has became a haven for money launderers and funnelled funds to North Korea in breach of international sanctions.

Rimsevics was held overnight on Saturday while officials raided his offices and home. He emerged from questioning on Sunday according to local TV reports to deny the allegations, which his lawyer said were only put to him verbally.

Latvia’s finance minister, Dana Reizniece-Ozola, said Rimsevics “should resign from his post at least for the time of the investigation”.

Prime minister Maris Kucinskis said: “I can’t imagine that a governor of the Bank of Latvia detained over such a serious accusation could work.”

Latvia’s president called for a meeting of the national security council to discuss the situation.

Latvia joined the euro in 2014 and Rimsevics, who has presided as governor of the country’s central bank since 2001, has sat on the ECB council ever since.

The ECB, which said that Rimsevics’ detention was a matter for Latvian authorities, has a duty to monitor the financial activities of eurozone member states and individual central banks.

ABLV Bank was forced to seek emergency financial support on Monday as it came under wider scrutiny for allegedly being a conduit for illicit financial activities.

It was ordered by the ECB to stop all payments following a run on its deposits sparked as its liquidity position had deteriorated sharply since the US Treasury accused it of allowing clients to conduct business with North Korea.

The bank has said the US accusations were based on unfounded and misleading information.