Financial Institutions Ensure Compliance with AML/CFT Principles
In an effort to promote a safe and stable financial system in Latvia, financial institutions operating in the country have taken steps to ensure compliance with Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) principles.
Regular Independent External Reviews
According to new policy guidance issued by the Association of Financial Institutions, financial institutions are required to undertake regular independent external reviews to ensure compliance with AML/CFT principles. The scope of these reviews and their execution are detailed in the Association’s Guidelines on Independent External Assessment of AML/CFT Compliance Program.
Cautious Approach with Specific Client Segments
Financial institutions have been instructed to be cautious when dealing with specific client segments, including those from designated countries or entities subject to sanctions. The guidelines emphasize the importance of knowing one’s clients and understanding their business activities and reputation.
- Designated countries
- Entities subject to sanctions
- Importance of knowing one’s clients
- Understanding business activities and reputation
Compliance with OFAC Sanctions Guidelines
In addition, financial institutions must comply with Office of Foreign Assets Control (OFAC) sanctions programs, which cover several categories of sanctions against individuals and organizations involved in international crime or violating US sanctions. The guidelines emphasize the importance of expeditious direct cooperation between financial institutions and US financial market participants.
- Categories of OFAC sanctions
- Importance of direct cooperation
Compliance with Prohibitions Stipulated in OFAC Sanctions
Financial institutions must comply with prohibitions stipulated in OFAC sanctions and preclude execution of transactions contravening those prohibitions, unless they contradict normative acts binding upon Latvia or the financial institution. The guidelines also emphasize the importance of transparency and accountability, requiring financial institutions to either fully implement OFAC sanctions or explain specific circumstances and reasons for non-compliance.
Training and Awareness
The Association has taken steps to ensure that financial institution employees are adequately trained on implementing OFAC sanctions, including regular training sessions and public events. The guidelines also emphasize the importance of internal control systems being sufficient and adequate for compliance with OFAC sanctions.
Overall, the policy guidance aims to promote a safe and stable financial system in Latvia by ensuring compliance with AML/CFT principles and OFAC sanctions.