Prevention of money laundering is a global issue which requires an extensive fight against economic and financial crime. Over the last few years, Foreign Investors’ Council in Latvia (FICIL) has emphasised the need to improve and develop the country’s capacity to fight the aforementioned crime and is pleased with the positive evaluation of the international organisations regarding the progress made in Latvia.
At the beginning of the year, the follow-up report by the Council of Europe’s Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (Moneyval) stated that Latvia’s regulatory framework for anti-money laundering, counter-terrorism and counter-proliferation financing (AML/CTF/CPF) is largely in line with with Financial Action Task Force (FATF) standards.
The announcement following FATF plenary session in Paris today is another positive step that demonstrates Latvia’s ample progress in implementing the changes in laws and regulations. The business sector awaited the assessment of Moneyval and FATF with great interest, as these evaluations are very important for building investors’ trust and confidence in the financial sector of Latvia and the stability of the overall business environment.
The events of 2018 highlighted the urgent need to strengthen the supervision of the financial sector as well as the ability to prevent and combat financial and economic crime. Significant positive changes have been realised in a relatively short period of time, and FICIL appreciates the efforts of the Government and public sector officials to improve the situation and implement the necessary reforms in the supervision of the financial sector. Constructive communication among business representatives and the Financial Intelligence Unit (FIU), the Financial and Capital Market Commission (FCMC), and other state institutions regarding changes and developments in the financial sector is also commendable.
There is a definite need for further work on restoring the reputation of Latvia’s financial sector in the international arena, and it is important to demonstrate continuity of the course taken. As one of the essential components for a successful continuation of financial sector reforms, FICIL emphasises the importance of educating the public and business sector on anti-money laundering, counter-terrorism and counter-proliferation financing and dealing with sanction risk management.
By full implementation of the AML Directive IV and V of the European Parliament and the Council, Latvia has turned a page on new culture of financial and business relations, meaning clear and transparent transactions; provision of necessary explanatory documents; disclosure of ultimate beneficial owners, etc. FICIL invites the Government and the respective authorities to find the best solution for communicating the current situation and changes in the regulatory framework to the public. Nevertheless, it is equally important to ensure proportionality between meeting the necessary requirements and improving the overall competitiveness of Latvia’s business environment.