AML Risk Management & Compliance
FIU performance results for the first nine months of this year reveal significant progress in all areas
The Financial Intelligence Unit of Latvia (FIU Latvia) issued 266 freezing orders in the first nine months of this year, freezing a total of EUR 212.5 million, which is 2.8 times (equivalent to EUR 137.5 million) more than in the same period during 2018.
FIU Latvia has sent 153 materials to law enforcement institutions for further investigation, an increase of 12% over the same period in 2018. In 88 of these cases, the responsible authorities have initiated criminal proceedings, of which 55% are criminal proceedings for autonomous money laundering offenses. In addition, FIU Latvia received 516 requests from foreign institutions and sent 627 requests to foreign FIUs.
The number of cases prosecuted for money laundering has doubled
During the first eight months of 2019, the number of money laundering cases presented in court increased significantly to 45 cases (up from 23 in 2018).
“As the fight against money laundering is a priority, the work has led to improved results. Improvement in the efficiency of the pre-trial investigation of these criminal cases is also due to other measures taken – specialized training events and active involvement in the development of guidelines have significantly improved and unified the understanding of investigators and prosecutors regarding the use of evidence and the application of the latest legal framework,” commented Attorney General Mr. Ēriks Kalnmeiers.
Latvian State Security Service develops Strategy for Prevention of Terrorism Financing
State Security Service (VDD) has developed the strategy for the prevention of terrorism financing for 2019-2021, aimed at improving the country’s prevention of terrorism financing, while also elevating the reputation of Latvia in the international financial markets.
The strategy outlines the terrorism threat situation in Latvia and in other countries, and also defines the joint strategic basic principles for the prevention of terrorism financing. These principles will help to secure an effective terrorism financing prevention system by both decreasing risks of terrorism financing and increasing coordinated and effective cooperation among the institutions involved in the prevention of terrorism financing.
FCMC informs banks on best practices in the identification of beneficial owners
In line with MONEYVAL recommendation to improve the understanding and application of the legislation on the identification and compliance control of the beneficial owners (BO) of the financial and capital market participants, the Financial and Capital Market Commission (FCMC) has carried out an examination of internal documentation developed by 15 banks and five branches of Member States' banks operating in Latvia.
The FCMC provided banks with best practice guidance for the identification of the BO and verification of compliance of identified beneficiary, as well as advising the areas where improvements are required. In addition, an explanation of the application of Latvian laws and regulations was prepared, analysing the problems identified in the application of the legislation, performing the identification of the BO and verification of compliance.
FCMC fines JSC “PrivatBank” one million euros
On September 13, The Board of the Financial and Capital Market Commission (FCMC) imposed a fine of EUR 1 019 319 on JSC "PrivatBank", for violation of the regulatory requirements for the prevention of money laundering and terrorism and proliferation financing. The bank is also subject to a number of additional legal obligations, including submitting an action plan to the FCMC, addressing breaches and shortcomings identified, and carrying out an independent review of its internal control system.
State Revenue Service applies sanctions and fines
During the first nine months of 2019, State Revenue Service (SRS) made 155 decisions to apply sanctions for failure to comply with the Law on the Prevention of Money Laundering and Terrorism and Proliferation Financing (AML/CFT/CPF Law). Fines were imposed for 152 of these cases, amounting to EUR 222,565.
For failure to comply with the SRS requirement and ensure the inspection and production of the requested documents, 24 cases were subject to fines amounting to EUR 79,110.
Sanctions Coordination Council begins work
The Council had its first session on August 21, where State Secretary of the Ministry of Foreign Affairs, Mr. Andris Pelšs, noted that the relevance of sanctions is growing rapidly in international relations. As an instrument of foreign policy, sanctions are also critical in promoting Latvia's interest in global security.
During the session, a Sanctions Coordination Council working group was set up to promote cooperation between responsible authorities and to co-ordinate action on specific sanctions violations. In particular, relating to the prevention of proliferation and terrorism financing, taking into account MONEYVAL recommendations.
The Council’s second session took place on October 14 and discussed the application of the Law on International and National Sanctions, as well as sanctions from the US Office of Foreign Assets Control. The Ministry of Foreign Affairs proposed the creation of a section on the Ministry’s website, which would make all sanctions materials publicly available to the institutions involved. In addition, the Council will develop an informative material that will explain the reporting obligations contained in International and National Sanctions Law.
FIU Latvia seminars on national risk assessment reports
In order to improve the circulation of information, the Financial Intelligence Unit of Latvia – in close cooperation with the supervisory and control authorities – is organizing seminars for subjects of the AML/CFT/CPF law. The seminars will provide detailed guidance on the AML/CFT/CPF risk assessments developed in 2019. The first information seminar was organised for sworn notaries in cooperation with the Latvian Council of Sworn Notaries.
FIU Latvia launches educational campaign
The Financial Intelligence Unit of Latvia has launched an educational campaign to inform the general public and entrepreneurs about avoiding involvement in financial and economic crime, as well as recommended courses of action for specific scenarios.
The Ministry of Foreign Affairs launches seminar on latest developments in application of sanctions
Taking place on September 27, the seminar saw experts from the Ministry of Foreign Affairs provide information on current types of sanctions regimes in Latvia and give updates on the application of sanctions. In the light of the implementation of MONEYVAL recommendations, the latest legislative changes were also covered.
The seminar was attended by 100 experts from Latvian financial institutions and companies, as well as officials from the State Police and the Prosecutor General's Office.
Finance Latvia discusses public-private partnership in mission to combat financial crime
In August 2019, representatives from the Finance Latvia Association and RUSI (Royal United Services Institute) discussed the best international practices regarding cooperation platforms for the voluntary exchange of information.
During the discussion, the current Latvian and international experience in public-private cooperation for combating financial crime was debated.
The event was attended by more than 50 high-level experts and heads of involved institutions - the Financial and Capital Market Commission (FCMC), the Corruption Prevention and Combating Bureau (KNAB), the State Revenue Service, the Financial Intelligence Unit of Latvia, the Ministry of the Interior, as well as representatives from the Ministry of Finance, the Prosecutor General's Office, the State Police and board members of financial institutions. Among the participants were international experts from Refinitv and RUSI – Jan Persson-Tryggedsson and Nick J. Maxwell.