"The Financial and Capital Market Commission (FCMC) implemented 15 Moneyval Recommendations to Improve Understanding and Application of the Beneficiary's Identification and Compliance Test for Financial and Capital Market Operators by conducting operations in 15 banks and five bank branches," FKTK said, adding it had "collected information on the banks' procedures" for verifying the beneficial owners of accounts.
"FKTK has prepared and forwarded information to banks, which summarizes best practices in the banks' procedures... as well as identifying areas for improvement," the regulator said.
The intention was to prevent complex ownership and management structures from hiding the true owners of assets, with such schemes often being used to hide criminal activity and attempts to get around sanctions.
Before a serious crackdown against such abuses was started, Latvia gained an unenviable reputation as a hub for money-laundering and offshoring of global significance. The current government has sworn to reverse this reputation for sharp practice and illegality.
In its report last year, Moneyval said:
"Latvia should ensure that the authorities have access to the relevant Beneficial Owner (BO) information as defined in the anti-money laundering (AML) and countering the financing of terrorism (CFT) Law at the time of incorporation and throughout the lifetime of all legal persons. Priority should be given to the Limited Liability Company (LLC) sector as this is the most prevalent and also at the highest risk of money laundering and financing of terrorism (ML/FT) according to the NRA."
The Organization for Economic Cooperation and Development has also provided recommendations on the subject in a report.
You can read more about current reform efforts in this regular bulletin on the subject, the most recent of which was issued July 19.
