MEP: op­er­a­tions of cer­tain banks in Latvia ruin the coun­try’s rep­u­ta­tion

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Money laun­der­ing is a prob­lem in Latvia, be­cause the ac­tiv­i­ties per­formed by cer­tain banks ruin the coun­try’s rep­u­ta­tion, said mem­ber of the Euro­pean Par­lia­ment Krišjā­nis Kar­iņš in an in­ter­view to Ri­etumu Ra­dio.

«This means in­vest­ments for our na­tional econ­omy are lost be­cause Latvia’s fi­nan­cial sys­tem is con­sid­ered cor­rupt. This is why ef­forts by Lat­vian gov­ern­ment to elim­i­nate this busi­ness in the coun­try are wel­come,» com­ments the MEP.

Kar­iņš is con­cerned that even though pres­sure and in­for­ma­tion re­gard­ing sus­pi­cions of money laun­der­ing mat­ters in Latvia have been present for a while, there has not been any re­sponse from the gov­ern­ment. «Pres­sure and in­for­ma­tion has been com­ing in Latvia’s di­rec­tion for at least a year. The fact that there has not been any re­sponse from Latvia’s gov­ern­ment has im­pacted the coun­try’s rep­u­ta­tion. I be­lieve the de­ci­sion made by the US Depart­ment of Trea­sury came as a re­sult of Latvia’s in­ac­tion,» said Kar­iņš.

He says that the Euro­pean Union has very func­tional laws to com­bat money laun­der­ing schemes. Un­for­tu­nately, adop­tion of laws is some­thing that is not well-or­ga­nized. The par­lia­ment has a spe­cial com­mis­sion that fol­lows the law-adop­tion process. «This prob­lem­atic mat­ter is di­rectly su­per­vised. Euro­pean Cen­tral Bank su­per­vises all banks un­der its wing. How­ever, di­rect mon­i­tor­ing of money laun­der­ing ac­tiv­i­ties is a duty for each separate mem­ber state. We have a su­per­vi­sory in­sti­tu­tion, but whether or not this in­sti­tu­tion is good at its job is an­other ques­tion,» added the politi­cian.

«The sit­u­a­tion with ABLV Bank caused us to ask if there is room to im­prove mon­i­tor­ing of banks in Eu­ro­zone. Be­cause, on one hand, mon­i­tor­ing is per­formed in a cen­tral­ized man­ner – through ECB – and, on the other hand, money laun­der­ing mon­i­tor­ing is a ques­tion of na­tional com­pe­tence. If a sin­gle weak point is found, which is some­thing Latvia is cur­rently con­sid­ered, dirty money flows into the coun­try one way or an­other,» says the MEP.

He also adds that it is im­pos­si­ble to get rid of dirty money in the coun­try. «There will al­ways be crim­i­nals. Nev­er­the­less, we can make it hard for them to per­form their ‘ac­tiv­i­ties’. Our goal is kick­ing dirty money out of Europe’s fi­nan­cial sys­tem, so that those who per­form money laun­der­ing ac­tiv­i­ties are forced to do this in third-world coun­tries, where the Euro­pean le­gal sys­tem has no reach, nor is there Euro­pean se­cu­rity or real es­tate to buy us­ing that money,» con­tin­ued Kar­iņš, adding that dirty money ends up in Latvia while look­ing for a place to hide.

He ex­plains that it is nec­es­sary to work on mon­i­tor­ing of the bank­ing sys­tem and in­ves­ti­gate how dirty money ends up and is used in Latvia.

Kar­iņš notes that the gov­ern­ment’s cho­sen di­rec­tion, in ac­cor­dance with which of­fi­cials hope to push out shell com­pa­nies, is cor­rect. «It could be an enor­mous chal­lenge, be­cause some­one who has opened a busi­ness in­volv­ing, let’s say money tran­sit, would have to change op­er­a­tions within a year’s time, which is in­cred­i­bly hard to pull off. It is nearly im­pos­si­ble to ac­com­plish in half a year. I think we can ex­pect ei­ther liq­ui­da­tion or merg­ing of banks,» he con­cluded.

Zane Bitere/LETA

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