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