A major Latvian bank facing U.S. sanctions for allegedly helping North Korea will be wound up under local laws after the European Central Bank declared it "failing or likely to fail."

In a statement early Saturday, the ECB said ABLV Bank's liquidity had deteriorated significantly, making it unlikely to pay its debts.

Following the ECB's decision, which also included the bank's subsidiary in Luxembourg, Europe's banking resolution authority decided the banks didn't represent a systemic risk for their countries or the region and should be wound up by local authorities rather than be "bailed in" under EU rules.

ABLV, Latvia's third biggest bank, was a lead player in an industry that has been a boom for the former Soviet state: helping shell companies in and around Russia bring their money into the European Union. Earlier this month, the U.S. Treasury declared the bank's practices a form of money laundering.