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Latvia’s former central bank governor was sentenced to six years in prison for bribery on Wednesday after a trial over the most prominent of a series of recent financial scandals to hit the Baltic country.
Ilmārs Rimšēvičs, head of the Latvian central bank from 2001 until 2019, was found guilty by the Riga district court of accepting bribes and a fishing trip to Russia from shareholders of a now defunct bank.
He was sentenced to six years in jail and asset confiscation, but Rimšēvičs — who has protested his innocence throughout the five-year process — said he would appeal.
His conviction stems from only one of a number of bribery, money laundering and fraud scandals that have roiled Latvia and neighbouring Estonia in recent years as authorities have tried to end years of Russians moving money — much of it of suspicious origin — out of Russia via Latvia.
The US in effect closed Latvia’s third-largest bank ABLV in 2018 after accusing it of helping to fund North Korea’s weapons programme. Only days later, Rimšēvičs was arrested and later charged with taking bribes from shareholders of Trasta Komercbanka, another bank which closed in 2016.
That set off a bitter legal struggle as Rimšēvičs refused to step down as governor, and took his case over whether central bank officials had immunity to the European courts with the backing of the European Central Bank. He alleged that banks that disliked his attempts to make the Latvian financial system more transparent had plotted against him and that he had been illegally barred from the ECB’s rate-setting meetings.
After winning in the first round, Rimšēvičs suffered defeat in 2021 when the Court of Justice of the European Union ruled that conduct “manifestly not committed in his official capacity” was not covered by the immunity.
Latvia’s financial system was in the 2010s known for its dependence on so-called non-resident deposits, mostly from Russia and other ex-Soviet states. Neighbouring Estonia was hit by one of the world’s biggest money-laundering scandals in 2018 when Danske Bank, Denmark’s biggest lender, said €200bn of questionable money flowed through its Baltic branch.
Latvia has since cracked down on banks doing non-resident business, with such deposits falling from their peak of more than half the total to less than a fifth today.
The Rimšēvičs case continues to have repercussions in central bank circles. Poland’s central bank has turned to the ECB to try to stop the country’s new prime minister, Donald Tusk, removing the governor.
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