Regulator: Latvian banks have taken 'substantial steps' to counter money laundering

Latvia's financial regulator, the Financial and Capital Market Commission (FKTK) said January 7 it carried out 12 inspections of banks related to money-laundering issues and found "only a few cases" meriting punitive action.

"In 2020, the Financial and Capital Market Commission carried out 12 inspections of banks in the area of the prevention of money laundering and terrorism and proliferation financing and concluded that generally banks had taken substantial steps to improve internal control systems," the regulator said.

"In previous years, most of bank inspections resulted in administrative proceedings and imposition of fines, while in 2020 there were only a few cases where the FKTK had to decide on administrative proceedings or the application of sanctions," it added.


The regulator said its priorities in 2020 were "to strengthen the risk-based approach and contribute to building a common understanding of regulatory requirements for anti-money laundering and countering the financing of terrorism and proliferation (AML/CFTP) and the application of sanctions among the participants of Latvian financial sector, including the drafting and publication of a guide explaining issues on the basic payment account."

FKTK said it had "significantly changed its approach in carrying out full-scope inspections, focusing on in-depth review of elements of internal control system," and promised this would continue in 2021.

In 2020, the regulator imposed fines totalling just over 2 million euros on three banks for violations of rules in the AML/CFTP area.

Those banks were the Regional Investment Bank (473,000 euros), Signet Bank (906,000 euros) and Citadele Bank (647,070 euros). 

As recently reported by LSM, the risk-based approach to banking will be the subject of a FKTK online seminar later this month.

FKTK Latvian Capital Market Forum 2021
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