FCMC ap­plies fines to three Lat­vian banks

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Fi­nance Cap­i­tal and Mar­ket Com­mis­sion in co­op­er­a­tion with United States Fed­eral Bureau of In­ves­ti­ga­tion found out that three Lat­vian banks – Baltikums Bank, Pri­vat­bank and Reģionālā in­vestī­ciju banka – have not com­plied with re­quire­ments for com­bat­ing money laun­der­ing and ter­ror­ism fund­ing.

FCMC re­ports that vi­o­la­tions are re­lated to client eval­u­a­tion, which in­cludes trans­ac­tion mon­i­tor­ing and in­suf­fi­cient in­for­ma­tion ac­qui­si­tion about clients’ true ben­e­fi­cia­ries and per­formed trans­ac­tions. Us­ing dif­fer­ent com­plex schemes and com­pa­nies reg­is­tered in off­shore ar­eas, cer­tain clients of the afore­men­tioned banks per­formed mul­ti­ple money trans­fers from their ac­counts through­out 2009 to 2015 to cir­cum­vent in­ter­na­tional sanc­tions es­tab­lished against North Korea. In­ter-state co­op­er­a­tion in un­cov­er­ing such crime schemes shows that, know­ing the risks associated with Latvia’s de­vel­op­ment as a re­gional fi­nan­cial cen­tre, the coun­try’s au­thor­i­ties can still pro­vide proper risk man­age­ment and re­duc­tion within NILLTFN and in­ter­na­tional sanc­tions. «FCMC states the fines serve as pre­ven­tive mea­sures to en­cour­age Lat­vian com­mer­cial banks to pay more at­ten­tion to pos­si­ble risks associated with vi­o­la­tion or cir­cum­ven­tion of in­ter­na­tional sanc­tions and avoid rep­e­ti­tion of such sit­u­a­tions. In a time when geopo­lit­i­cal risks are on the rise and dif­fer­ent crime schemes keep be­com­ing more and more com­plex, banks’ in­ter­nal con­trol sys­tems have to be on a level that would help pre­vent the bank be­ing used in sus­pi­cious trans­ac­tions. Co­op­er­a­tion be­tween FCMC and su­per­vi­sory in­sti­tu­tions of other coun­tries of­fers con­fi­dence that Latvia’s bank­ing sec­tor will con­tinue de­vel­op­ing as a re­li­able part­ner,» says FCMC Chair­man Pe­teris Put­nins.

Put­nins ex­pressed grat­i­tude to the United States Fi­nan­cial Crimes En­force­ment Net­work for the as­sis­tance that was pro­vided to re­veal the afore­men­tioned crime. Also FCMC re­ports that all three banks co­op­er­ated with FCMC and ad­mit­ted the prob­lems un­cov­ered by au­thor­i­ties. FCMC has signed ad­min­is­tra­tive agree­ments with those banks. Those agree­ments will help se­cure more ef­fi­cient com­pli­ance with pre­ven­tive mea­sures. Agree­ments also state banks have to fines worth a to­tal amount of EUR 641,514.

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