Financial Crime World

Latvia Boosts Fight Against Money Laundering and Terror Financing

In recent years, Latvia has made significant strides in enhancing its ability to combat financial crimes, including money laundering (ML) and terror financing (TF). This effort is a testament to the country’s commitment to ensuring a safe and secure financial sector.

Strengthened Public-Private Partnerships

Latvia’s Financial Intelligence Unit (FIU) has been actively utilizing public-private partnership models, such as the Joint Money Laundering Intelligence Taskforce (JMLIT), to coordinate efforts with international partners. This collaboration has enabled the country to share intelligence and best practices, ultimately leading to more effective anti-money laundering (AML) and combating the financing of terrorism (CFT) measures.

Enhanced AML/CFT Measures

Latvia has implemented various measures to tackle de-risking phenomena and transition to better risk management. Some of these initiatives include:

  • Prohibition of cooperation with high-risk shell companies
  • Effective internal control systems
  • Use of digital solutions

The country’s banking industry is also committed to a no-tolerance approach to financial crimes, with regular training and workshops on AML/CFT.

Sanctions and Enforcement

In 2018, the Financial Services Authority sanctioned three banks for a total of €3.9 million. In 2019, four banks were sanctioned for more than €5 million. Additionally, in 2020, three banks were sanctioned for more than €2 million.

Compliance Requirements

Latvia’s AML/CFT law requires all financial institutions to ensure and prove employee training in AML/CFT and enforcement of sanctions. The use of adverse media reports and interconnection with state registers is also actively used for customer due diligence (CDD).

International Recognition

Latvia’s efforts have been positively assessed by international non-profit organizations, such as Global Witness, which advocates for transparency issues. The country’s financial sector has also implemented industry guidelines on AML/CFT, including a no-tolerance approach to financial crime.

Conclusion

The article highlights Latvia’s commitment to combating money laundering and terror financing, as well as its significant progress in increasing the amount of frozen funds and declining foreign customer deposits. These efforts demonstrate the country’s dedication to ensuring a secure and stable financial sector for all stakeholders.