by F. William Engdahl, … with New Eastern Outlook, Moscow
[ Editor’s note: Engdahl’s story today shines a new spotlight on the US thuggery of “Full Spectrum Dominance”. In short it lays the foundation that based on “security reasons” the US must have control over everything, everywhere, to protect itself; and anyone resisting is deemed an enemy threat, which triggers “all options are on the table”. Can you feel the love?
There has been virtually no corporate investigative media pressure on what a Pandora’s box the Treasury has become. The new magic wand it now has to avoid all due process, ignoring decades of international agreements where countries agreed to follow procedures over legal disputes, makes it judge, jury and financial executioner, as you will read below.
The micro version is if an individual or an NGO is deemed too friendly with any foreign entity or cause through which it receives or even handles funding, then it can be charged with suspected money laundering. For individuals this allows the government to freeze (ie: sieze) all of your assets, leaving the target broke, so it has no way to fund a legal defense.
This has been going on for years, usually under the radar; but because virtually no one views this as a threat to themselves, no one really cares what is happening to these other people. The case law precedent is being built up that can be used to charge anyone involved in international relations and reporting.
VT people have been probed with this tool to intimidate us, which is why we always maintain a good-sized closet of goodies to release if someone really tries to bully via this scam.
We have been disappointed in our fellow Americans, once renowned for their mistrust of government and politicians, and who have historically always screamed to high heaven over government corruption.
But what we have seen is that when the correct demonized target is used to serve these confiscations with no due process, American just don’t care that others are being extorted.
Meanwhile back at the ranch, the big multinationals, including the defense companies, are money laundering out the wazoo, even getting Congress to tidy up legislation to make sure their loopholes are nice and tight.
The terms kleptocracy was once in vogue. But now with Trump at the helm, we are getting the full monty. The only possible light at the end of the tunnel that we see now is that Mueller is sniffing around the Trump family “bartering”.
Despite divesting himself of ownership and control of all of his companies, both his children and ex-convict daddy Kushner are being looked at closely for lining their pockets under what they may view as presidential immunity.
While Trump may have that, the kids surely do not. General Flynn screwed up when he brought his modest income son into what he thought was going to be the pinnacle of his career…influence peddling.
Top brass start dreaming of this when nearing retirement, planning to follow in the shoes of so many before them who have done the same, including Congressman and top administration officials. Any yes, many try to set their kids up in it, too.
Might Mueller be thinking about the cherry on top of his long career, as going where no law enforcement official has gone before and expose this in a big way so the sleeping public might scream for a full house-cleaning, and no candidate running for office could avoid supporting it?
It is too early to tell, but the tea leaves indicate that the Russia probe is the coat hanger that Mueller is using to get in the car and be able to pop the trunk open. You all will please excuse me if dream about what that day might be like … Jim W. Dean ]
– First published … March 3, 2018 –
Washington has begun a new phase in its geopolitical financial warfare in the small Baltic republic of Latvia. Within days it managed to force the Latvian government and the European Central Bank to force the dissolution of Latvia’s third largest bank without even a hint of a legal process.
Whatever the true relation of Latvia’s ABLV Bank AS to money laundering, to North Korea or to Russia, the Washington move can be seen as an ominous precedent for a next phase of blackmail on the financial structures of the European Union or other foreign states not singing the preferred Washington tune.
On February 23, despite the fact that ABLV announced it had raised almost $1.7 billion in four days to stabilize deposit withdrawals, the ECB claimed the bank lacked adequate liquidity and deemed it “failing or likely to fail,” committing it to Europe’s Single Resolution Board for dissolution.
The move followed by hours the arrest of the Latvia representative on the ECB Governing Council, Latvia Central Bank Governor Ilmars Rimsevics, amid bribery allegations in a case supposedly not linked to ABLV’s takedown by the ECB. He was released two days later without being charged, but the timing is highly suspicious.
At that point the ECB instructed the Latvian supervisory authority, the Financial and Capital Markets Commission (FCMC), to impose a moratorium on the bank to give time to the bank to stabilize its situation. A moratorium was also imposed by the Luxembourg authorities for the subsidiary of the bank in Luxembourg.
US Treasury Action
Remarkable about the ECB action to shut down the Latvian bank was that it followed just days after a February 13 US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) “draft measure” naming ABLV Bank an “institution of primary money laundering concern pursuant to Section 311 of the USA PATRIOT Act.”
The US announcement, not surprisingly, triggered ABLV bank depositor runs, and the bank was immediately cut from dollar interbank market borrowing, making impossible that the bank pay its dollar obligations.
That situation was slyly used by the ECB to justify shutting down ABLV, even though indications are that a closing could have been avoided. The ABLV was victim of a US Treasury-ECB “drive-by shooting.”
In the space of a mere ten days the US Treasury, issuing what it calls a “draft,” managed to force the EU to kill one of the banks of the Eurozone, moreover a bank with extensive ties to Russian and Central European companies, without benefit of legal proceedings or hearings.
The issue is not whether ABLV was doing money laundering or not. Many more prominent banks such as HSBC or JP MorganChase or the highly esteemed Deutsche Bank, have been charged with significant illegal money laundering for organized crime or other illegal actions and received little more than a slap on the wrist.
There seems to be a political agenda behind this latest US Treasury action, and indications are it is the beginning of what is likely to be an operation to completely cripple Russian financial activity in the Eurozone that has somehow managed to avoid the worst of US financial sanctions so far.
The EU attack on Cyprus in 2012, imposing a radical new bail-in law that saw depositors forced to pay a share of Cyprus bank bad debts, created the trigger for many Russian companies and Russian high-net-worth clients reportedly to shift from Cyprus as their EU foreign base of finance to Latvia.
ABLV has been the largest benefactor of that Russian and Central European money inflow since then. Clearly the US Treasury has been waiting for the right moment to strike.
Now with Russia in a key role in brokering a ceasefire (against Washington interests) in Syria, as well as recent Moscow diplomacy to avert an escalation of the North Korea crisis that Washington so devoutly wishes, hitting a key financial artery of select Russian companies is an excellent way to “hit Moscow where it hurts,” as it seems.
The US Treasury notice that killed ABLV last month is lacking in any detailed charges that show a smoking gun or even a gun at all. The statement declares it is based on, among other issues, the involvement of ABLV with “entities” involved in the North Korean missile procurement.
The indictment claims that the majority of ABLV’s customers are “high-risk shell companies registered outside of Latvia.” How they define or even determine high risk is left to the imagination. As for their use of the term “shell companies registered outside Latvia,” most major US corporations such as Apple or Halliburton use offshore shell companies to avoid US taxes.
The Treasury’s FinCEN then goes on to claim as further justification for their extreme action of cutting ABLV from the dollar funds market, de facto forcing its closure, the fact that in August, 2016 the Ukraine National Bank issued a warning to Ukrainian banks that ABLV was suspected of being related to risky financial operations, including laundering the revenues of criminal activities.
Anyone familiar with the corruption in Kiev, especially following the February 2014 US-instigated coup, might not find the Ukraine National Bank the most impeccable source for the closing of a Latvian bank within the Eurozone.
The US Treasury’s FinCEN concludes that this financial activity of ABLV, “includes money laundering and other transactions conducted by a range of illicit actors that threaten the national security of the United States.”
All evidence in the Latvian bank killing points to a new phase of US financial warfare against Russia and Russia’s ability to avert the effects of those US sanctions. The timing is suspicious as well, as it comes just days before the important March 18 Russian presidential election.
Following the EU actions against Cyprus banks in August 2012 where the controversial “bail-in” practice was tested by forcing bank depositors above a certain amount to “bail in” and face loss, Russian corporate offshore funds reportedly moved to Latvia as an alternative.
Since Latvia joined the Euro in 2014 Latvia has become a major channel to allow Russian corporations and banks to operate within the EU. The ABLV became the major beneficiary of that Russian inflow.
In August, 2017 the US Congress passed the Countering America’s Adversaries Through Sanctions Act (CAATSA). That law requires the US Treasury Secretary, former Goldman Sachs banker Steve Mnuchin to “describe in detail the potential effects of expanding sanctions…to include sovereign debt and the full range of derivative products” of the Russian Federation.
On January 29, the US Treasury issued that report. It included 1) Section 241: Report on Senior Foreign Political Figures and Oligarchs in the Russian Federation; 2) Section 104(e): Report on Contributions to Iran’s Ballistic Missile Program; 3) Section 242: Report on Effects of Expanding Sanctions to Include Sovereign Debt and Derivative Products; 4) Section 273: Examining the Counter-Terror Financing Role of the Department of the Treasury in Embassies; and 5) Section 311(d): Designation of Additional Persons Related to North Korea.
Further to this report, it released a list of numerous Russian cabinet members and business reportedly close to President Putin, though bizarre enough, declaring that the people list was not a sanctions list.
The timing of the CAATSA report and days later of the US Treasury announcement killing a known bank used by Russian companies in the EU suggest that Washington is taking aim now at breaking the remaining ties between EU banks and Russia, hitting North Korea in the process.
Clearly Washington is aiming at far more than a tiny Latvian bank.
It is also a major reason why the Russian Central Bank is buying gold reserves at a fever pace. In February official Russian state gold holdings exceeded those of China, another heavy gold buyer, for the first time.
And Russia recently announced that Russian financial institutions and firms are ready to work without SWIFT’s interbank cash transfer services, according to Deputy Prime Minister Arkady Dvorkovich.
An escalation of direct US financial warfare against Russia could unleash far more negative consequences for US and EU financial systems than Washington bargains for.
What is alarming or should be to depositors or citizens of countries outside the United States is how this ABLV case sets a precedent for far more serious financial attacks on key banks of countries that refuse to follow a Washington agenda.
F. William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics, exclusively for the online magazine “New Eastern Outlook.”
Jim W. Dean Archives 2009-2014