Financial Sector Transformation
Latvian Government adopts action plan to prevent ML/TF/PF in 2020-22
On December 17 2019, the Latvian Government adopted a series of measures to prevent money laundering, terrorism and proliferation financing (ML/TF/PF) for the period of 2020-22.
These measures are based on international, national, and sectoral risk assessments; recommendations from international organisations; and results and learnings taken from the previous plan. The plan aims to strengthen Latvia's capacity to fight ML/TF/PF, reduce various risks in order to promote public security, increase the competitiveness of the economic environment, and improve trust in Latvia's jurisdiction.
The plan is divided into 11 actions, which align with the effectiveness indicators used by the European Council's Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL) during the fifth round of evaluation.
FCMC signs administrative agreement with SEB Latvia for improvements to AML/CTF
The Financial and Capital Market Commission (FCMC) and AS SEB banka have signed an administrative agreement aimed at adopting common actions to make improvements to AML/CTF following an inspection of the Bank by the FCMC in 2017.
During the 2017 inspection, the FCMC concluded that further improvements of internal control systems were needed. The main discrepancies occurred because, on limited occasions, the documentation typically used to prove a client’s economic activity possessed insufficient scope and quality to ascertain whether the client’s transactions were suspicious or not. Additionally, in some cases, the client’s beneficial owner was not sufficiently proved or documented.
The joint agreement between FCMC and AS SEB banka will address and rectify the issues and concerns raised during the 2017 inspection.
Banks to be provided with all necessary support to meet OFAC sanctions
The Finance and Capital Market Commission (FCMC) has pledged to provide all the necessary methodical support required by Latvian financial institutions in order to meet new regulatory enactments introduced by OFAC sanctions.
While the FCMC will provide methodical support to Latvian financial institutions regarding the recent OFAC sanctions, it will not be making decisions on their behalf. Each bank should possess their own regulatory framework and, therefore, should evaluate the situation, make appropriate decisions and provide their clients with all the necessary information, emphasises Santa Purgaile, Chairman of the FCMC.
The FCMC also understands that, in such instances whereby a bank establishes a business relationship with persons or institutions under OFAC sanctions, the bank might have reinforced interest and additional questions. This may result in additional research of the persons or institutions in question, and could potentially have a significant impact on that company's activities.
Further information on the OFAC sanctions is available here.
Register of Enterprises grants free access to information on more than 650,000 right holders
Effective immediately, the information relating to legal persons, including company officials and beneficial owners, stored in 14 registers on the Register of Enterprises will be available for free online at: https://info.ur.gov.lv. Descriptions of all services are available here.
As a result of the opening of the registers, current and historical information on more than 650,000 right holders from 14 registers and lists is now publicly available. This includes details from JSC, LLC, associations, etc., as well as legal facts such as commercial pledges, marriage agreements, etc., from the Commercial Register, The Commercial Pledge Register, and the Register of Associations and Foundations.
"The leading European business registers, which already grant free public access to data, reap significant benefits. When information is freely available, more people use it and can report inconsistencies and mistakes, improving the overall quality and accuracy of the data,” states Guna Paidere, Chief State Notary of the Register of Enterprises.