Latest Latvian financial sector update published

After a brief hiatus, the regular update of attempts to reform Latvia's financial sector has returned November 6, complete with an introductory statement by the new head of the financial regulator.

Santa Purgaile was appointed as the Chairperson of the Financial and Capital Markets Commission (FKTK) on October 24 and writes that:

"As the new Head of the Financial and Capital Market Commission (FCMC), it’s a great honour for me to join such an experienced team of professionals and carry out the strengthened mandate of an independent financial supervisor given to me by the Latvian Parliament and Cabinet of Ministers."

"We are rigorously implementing recommendations from international institutions – including MONEYVAL and the IMF – and are stepping up dialogue with international partners to demonstrate the significant steps we are taking to drive the Latvian financial sector forward," Purgaile adds..

"The work we’re doing is consistent and our efforts will persist. The FKTK is strongly committed to providing guidance through inclusive dialogue and support to all financial market participants and, where necessary, will also enforce compliance in prudential and, in particular, anti money-laundering (AML) requirements," she says.

As previously reported by LSM, the update was launched in August 2018 as part of a concerted effort to turn around the unenviable, if not unearned, reputation of the Latvian financial sector as a global money laundering hub. Initially published twice per month, it switched to a monthly format a year ago, though the most recent edition was in August this year.

November 6 also provided a timely reminder of how murky the Latvian financial sector had become before the attempt to clean it up, with the Organized Crime and Corruption Reporting Project (OCCRP) publishing a story that "through a proxy, [Ukrainian politicians] Serhiy Lovochkin and Yulia Lovochkina were co-owners of [Latvian] Trasta Komercbanka that hosted the Russian Laundromat, a vast financial scheme unmasked by OCCRP in 2014."

The story, based on leaked emails, also includes revelations about the activities of Paul Manafort, former campaign director for U.S. President Donald Trump. Manafort is serving a prison sentence for federal financial crimes.

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