ECB Wins Top Court Fight With Latvia Over Ban on Rimsevics

(Bloomberg) -- The European Union’s highest court overturned Latvia’s suspension of central bank Governor Ilmars Rimsevics as part of a bribery probe that’s shaken the Baltic nation.

In a victory for the European Central Bank, the EU Court of Justice on Tuesday said Latvia last year illegally prohibited the ECB Governing Council member from performing his role as central bank governor.

The judges ruled that Latvia had failed to establish that “the relieving of Mr. Rimsevics from office is based on the existence of sufficient indications that he has engaged in serious misconduct.”

Both Rimsevics, who is a ECB Governing Council member, and the Frankfurt-based central bank had challenged Latvia over the measures, which included suspension of duties in the central bank. The EU court decision can’t be appealed.

Rimsevics “can return to work already today,” General Prosecutor Eriks Kalnmeiers told journalists in Riga on Tuesday. Still, the Latvian central banker faces restrictions on his travel, his bail and on meeting certain people, and without a security clearance he won’t have access to certain documents at the central bank, Kalnmeiers said.

‘More Severe’

The court’s decision was “more severe” than expected, Martins Kveps, a lawyer for Rimsevics, said by telephone, since his lawyers asked for a declaratory judgment and not a full lifting of the restriction.

Latvia decided against handing over information to the EU court on Rimsevics, since the tribunal said it would then share the information with the defense, Kalnmeiers said on Tuesday. Latvia’s representatives were not aware they could submit information confidentially, he said. Rimsevics’s decision to continue to give testimony to prosecutors, which then had to be checked out, slowing the process to send it to court in Latvia, Kalnmeiers said earlier.

The Latvian central banker was met in February last year by police at the airport after returning from Spain, detained and questioned in a bribery probe. He was charged with accepting bribes of about 250,000 euros ($283,975) and a trip from a local lender, in exchange for help with regulatory issues.

Denied Wrongdoing

Rimsevics has denied all wrongdoing and blamed a group of banks for the allegations and began giving testimony to Latvian prosecutors. His term of office runs out in December.

The ECB accused Latvia at an EU court hearing in September of “disregarding entirely” the constitutional independence of Rimsevics and to apply “the most restrictive” measure available, which effectively suspended the governor from all his main roles until the end of the criminal probes.

The central banker’s detention came amid a whirlwind of damaging information about Latvia and its banks in February 2018. Days before Rimsevics’s troubles, the U.S. Treasury accused ABLV Bank AS of money laundering and proposed banning it from the American financial system, sparking its demise. Rimsevics blamed ABLV for his legal woes, while ABLV blamed Rimsevics for the U.S. Treasury decision. Both deny wrongdoing and both are fighting in court to clear their name.

The ECB said it took note of the ruling and the Bank of Latvia declined to immediately comment.

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