The Association of Latvian Commercial Banks (ALCB) welcomes amendments to the Law on Prevention of Money Laundering and the Financing of Terrorism that were today passed by the Parliament. These amendments ban serving of shell companies and establish a platform for effective information exchange between private institutions and government authorities in the fight against financial crime.

The ALCB considers it unacceptable to cooperate with high-risk international clients, especially those entities that are considered shell companies within the meaning of the Law.

The ALCB actively participated in drafting the amendments and appreciates that they incorporate solutions that are innovative on an international level — specifically, the creation of a platform for effectively coordinating efforts to fight financial crime. Having this in place would allow not only for faster investigations and convictions, but also for the prevention of potential illicit actions. Other measures that would put a complete end to servicing high-risk international clients in Latvian banks are within the remit of the Financial and Capital Market Commission.

The ALCB expects that the institutions responsible for monitoring the banking sector will act decisively to address the identified shortcomings and avoid any further negative reports from the US Finance Ministry's Financial Crimes Enforcement Network or from other international partners, statements which could completely destroy Latvia’s international reputation.

We believe that in order to continue working efficiently with the US and other international partners it is important to maintain regular and coordinated dialogue between all parties involved, thus ensuring coherent communication of the full range of the Latvian government’s planned actions. Therefore we welcome the establishment by prime minister Māris Kučinskis of an Advisory group for change management and coordinated communication within the Latvian financial sector. It is crucial that this group include partners from international organisations as well as regional representatives from banking groups, thus providing necessary international expertise and know-how.

In the event that the Moneyval report on Latvia, due to be published this autumn, proves to be unfavorable, we can confirm that it will bring immense challenges for banks servicing Latvian companies and residents. The Latvian government must do everything necessary to demonstrate clear action and commitment to fighting financial crime and to not allow Latvia’s banking system be used for unlawful activities which go against international practice and rights.       

The ALCB will continue working on the consistent adoption of the Association’s self-regulation standards and their ever-stricter observance among ALCB members. It will also regularly re-evaluate the need for any additions to these documents, adding new requirements where needed.            

 

Members

 

Associate members