Banks to face bigger fines for money laundering

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The Latvian parliament on Thursday adopted amendments to the Credit Institution Law stipulating higher fines for banks and bank employees violating anti-money laundering regulations.

The new legislation ups the maximum fine the Financial and Capital Markets Commission (FKTK) - Latvia's finance authority - can slap on a bank, up from 10% of annual net revenue to 10% of annual turnover.

If 10% of the turnover is less than €5m, the FKTK will be able to impose a fine of up to €5m. The FKTK will also be able to impose a fine of up to €5m against bank employees, executives and persons acting on behalf of the bank.

The finance authority will apply the fines for violating laws regulating the following:

  • Vetting and identifying clients;
  • Reporting suspicious transactions;
  • Providing information to the anti-money laundering office;
  • Foregoing a transaction;
  • Asset freezes;
  • Creating a system of internal controls;
  • Storing and deleting information.

The authority will also be able to act in cases if banks break national and international sanctions.

The amendments took place after the Economic Cooperation and Development presented its report on the implementation of the Anti-Corruption Convention in Latvia.

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