"It is important to note that, by the amendments to the Plan, it is intended to delete from the objective of the Plan the reference to Latvia as a regional financial services center,"' the Finance Ministry said ahead of the cabinet meeting.
"By the amendments to the Plan, it is intended to delete from the objective of the Plan the reference to Latvia as a regional financial services center. The changes the financial sector has undergone, as well as the received Moneyval evaluation is not supporting [sic] the topicality and need for such a reference, and currently, till the completion of the process of changes and consolidation of the international reputation of Latvia, such reference only triggers further deterioration of the international reputation of Latvia, as it is capable of creating a false impression that Latvia continues ignoring the increased risks and fails to perform adequate management thereof," a Ministry statement said.
''Increasing the conformity of anti-money laundering and combating the financing of terrorism and raising the reputation of the country still remains the cross-cutting issue of. The Plan provides that the increased money laundering and terrorism financing risk exposure of the Latvian financial sector poses threats to the reputation of the country and a stable long-term development of the Latvian financial sector, therewith the measures included in Plan are planned and implemented, provided that they do not increase the referred to risk level, but are oriented towards controlled scheduled reduction thereof.
A few other textual changes are also made, including one that broadens the definition of "terrorist financing risk" to include "terrorist financing and proliferation risk."
The moves are part of an attempt to restore the reputation of Latvia's financial sector after a series of massive money-laundering scandals that have seen Trasta Komercbanka shut down, ABLV bank undergoing liquidation and questions about several other "non-resident" oriented banks' actions over the past decade.
For the last year, government and officials have been scrambling to redefine the sector and show they are serious about cracking down on Latvia's reputation as a money-laundering hub. Various initiatives have been launched to that effect, including the launch by government of what was styled a "regular newsletter" informing the international community of ongoing efforts.