RIGA, Latvia (AP) — When the U.S. hit North Korea with sanctions last year, Pyongyang’s state-owned banks found a quiet backchannel to keep money flowing to the country’s ballistic missile programs, the U.S. says: the tiny European country of Latvia.
One of the biggest banks in Latvia — a member country of the European Union and NATO — built a business from processing illegal money transfers, enabling North Korea to continue to procure missiles, the U.S. government says.
Latvia has come into focus as a potential weak link in the West’s banking system as the U.S. and EU increasingly rely on financial sanctions as a weapon in their diplomatic spats — with North Korea, but also Russia and Syria, among others. After a slew of accusations of high-level corruption, Latvia is now trying to appease its U.S. and European allies and drastically reform its financial sector.
Latvian Prime Minister Maris Kucinskis told The