Moneyval requirements should be a priority for Latvia next year
Next year, Latvian government’s main priority should be compliance with requirements of European Council’s Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism or Moneyval, said Bank of Latvia Council member Mārtiņš Kazāks in an interview to Rīta Panorāma programme of LTV.
«If we have a look at the government’s tasks for next year, we will notice the one of the most important ones is sorting the country’s financial system, dealing with stability risks, money laundering and terrorism financing problems,» says Kazāks. He says that if Latvia fails to comply with Moneyval requirements next year, there may be problems with transaction processing, such as denied access to payment processing systems of other countries, which could in turn increase the prices of resources and budget deficit costs for Latvia.
«If the situation does not improve, it may become difficult for local companies to perform international transactions, which would make it more difficult for them to access lending services, make a number of products more expensive and negatively affect the country credit rating. The latter would make it more expensive for the country to service its debt and force the government to divert more money to this,» says Kazāks, adding that 60% of Latvia economy consists of export.
At the same time he admits that measures realized by the government so far are promising. «The steps undertaken so far are headed in the right direction – there is an action plan, and work is performed to enhance the Control Service [Money Laundering Enforcement Service]. But a year is a short period of time, which means all responsible institutions should world very closely with one another every day to achieve ambitious goals,» he says.
On 25 September, the Cabinet of Ministers approved the action plan for the implementation of recommendations provided by Moneyval. Prime minister’s advisor for matters of strategic communication Guna Šnore said that the government has approved a comprehensive action plan for implementation of recommendations included in the fifth round of evaluations by Moneyval to help improve Latvia’s money laundering and terrorism funding prevention system. The action plan’s direction complies with Moneyval evaluation system’s eleven performance indicators.
The action plan’s main priority is enhancing risk-based supervision and implementation of preventive measures. This includes controlled, transparent and professional governance of ABLV Bank’s liquidation process; effective information exchange among investigation authorities and equalization of approaches; provision of human resources for supervisory, control and law enforcement institutions to expand their capacity and response capabilities; introduction of new information technology solutions for better data processing; improvement of sanction system in cooperation with partners to assist with its further development and its necessity. It is important to mentioned that along with adoption of regulations, Latvia has already adopted a number of measures detailed in the anti-money laundering directive – a centralized bank account registry, virtual currency regulation, a true beneficiaries openness principle, reduced supervision thresholds for circulation of electronic money (down to EUR 150). When implementing this plan, the Cabinet of Ministers committed to ensuring full adoption of the antimoney laundering directive ahead of schedule, reviewing necessary documents before 1 June 2019 to ensure their submission to the Saeima as quickly as possible.