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Continuing Latvian saga of the fight against money laundering

The Latvian government introduces further measures in its fight against money laundering by amending several acts

The new government’s so-called “general overhaul” has led to further substantial and institutional changes in Latvian legislation.

In order to comply with recommendations by Moneyval, the permanent monitoring body of the Council of Europe competent in the field of combating money laundering, the Latvian parliament has adopted a number of changes to various laws. The amendments also aim at transposing the EU’s 5th Anti-Money Laundering Directive earlier than legally required – in order to demonstrate Latvia’s determination to enforce its fight against Money Laundering.

As of 29 June 2019 the personal scope of the freshly renamed Law on the Prevention of Money Laundering and Terrorism and Proliferation Financing has been considerably widened. The law now also applies to insolvency practitioners, outsourced accountants, sworn auditors, commercial firms of sworn auditors and tax advisors, as well as any other person who undertakes to assist on tax matters. Moreover, persons engaged in the circulation of art and antiques will also be subject to legal obligations.

Not only has the personal scope been expanded – the time frame of measures by the competent authorities: during insolvency or liquidation proceedings the law must from now on be obeyed, too.

Relevant changes have also been made to the Law on International and National Sanctions, in force from 4 July 2019. The idea is to be compliant with international sanctions more quickly. In this regard, the changes e.g. provide for the application of financial and civil sanctions imposed by the United Nations without undue delay. This means that Latvia need not wait for the EU to transpose UN sanctions to EU sanctions.

Finally, changes to the law on the national “watchdog” in financial matters, the Financial and Capital Market Commission, involve a smaller board. The number of board members is reduced from 5 to 3 and the head of the board will have to pass an open competition. Additionally, the new board will be elected by the parliament. The idea behind this measure is to increase the accountability of the board’s actions.

 

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