Latvia

New Documents

Latvia’s Ministry of Finance issued a press release announcing the signing of an agreement between Latvia and the United States for anti-money laundering, counterterrorist financing and nonproliferation technical assistance.

Latvia’s Financial and Capital Market Commission issued recommendations in cooperation with the financial industry on how to improve internal control systems and customer due diligence in order to prevent financial crimes.

News

Enforcement Actions

The Financial and Capital Market Commission entered into an administrative agreement with the Riga, Latvia-based bank requiring it to pay a €647,070 fine and implement an action plan for improving the scope and effectiveness of its anti-money laundering and counterterrorist financing program.

The Financial and Capital Markets Commission of Latvia entered into an administrative agreement with the Riga, Latvia-based bank requiring it to pay a fine and implement improvements to its anti-money laundering and counterterrorist financing program.


Important Facts

  • The U.S. State Department categorizes Latvia as a jurisdiction of primary concern. The main sources of laundered funds are tax evasion and organized criminal activities, including prostitution and fraud committed by Russian and Latvian groups. In contrast, proceeds from narcotics and contraband smuggling are not a major source of laundered money. The country’s geographic location and high levels of public corruption represent challenges to combating money laundering, though regulatory agencies keep close watch on financial transactions related to terrorist financing. Latvia is a regional financial center with a sizeable nonresident deposit base. Total bank deposits have increased in the past year, with nonresidential deposits accounting for almost half of total bank deposits. In May 2015, the Financial and Capital Market Commission stated that the growth of nonresident deposits from Russia has remained steady despite international sanctions imposed in the spring of 2014. There is a black market for smuggled goods, primarily cigarettes, alcohol and gasoline, though smuggling does not generate significant funds laundered through the financial system. Suspect transactions and the overall value of laundered money have remained below levels before the financial crisis.
  • KYC Covered Entities: Banks, credit institutions, life insurance companies, and intermediaries; private pension fund administrators, investment brokerage firms, and management companies; currency exchange offices, payment service providers, money transmission or remittance offices, and e-money institutions; tax advisors, external accountants, and auditors; notaries, lawyers, and other independent legal professionals; trust and company service providers; real estate agents or intermediaries; organizers of lotteries or other gaming activities; persons providing money collection services; EU-owned entities; and any high-value goods merchant, intermediary, or service provider
  • STR Covered Entities: Banks,credit institutions, life insurance companies, and intermediaries; private pension fund administrators, investment brokerage firms, and management companies; currency exchange offices, payment service providers, money transmission or remittance offices, and e-money institutions; tax advisors, external accountants, and auditors; notaries, lawyers, and other independent legal professionals; trust and company service providers; real estate agents or intermediaries; organizers of lotteries or other gaming activities; persons providing money collection services; any high-value goods merchant, intermediary, or service provider; and public institutions
  • Enhanced Due Diligence Procedures for PEPs: Foreign: Yes; Domestic: No
  • Money Laundering Criminal Prosecutions/Convictions: Prosecutions: 27 (Jan. 1, 2015 – Nov. 1, 2015); Convictions: 14 (Jan. 1, 2015 – Nov. 1, 2015)
-Source: 2016 International Narcotics Control Strategy Report (INCSR)

Rankings

FATF i | 2013 Methodology

Technical Effectiveness
Compliant : 7 High : 0
Largely Compliant : 33 Substantial : 1
Partially Compliant : 0 Moderate : 8
Non-Compliant : 0 Low : 2

Latvia's technical compliance was re-rated in a Jan. 22, 2020 follow-up report

BASEL i

Rank : 97/141
Score : 4.62/10

TRANSPARENCY INTERNATIONAL i

Rank : 44/180
Score : 56/100

Tax Justice Network i

Rank : 65/133
Score : 59/100