Finance and Capital Market Commission in cooperation with Federal Bureau of Investigation’s Counterproliferation Center found out in a target inspection that Latvian banks – Norvik Banka and Rietumu Banka – had not followed requirements of regulations for the prevention of money laundering and terrorism funding.
Violations are associated with client evaluation, which includes transaction monitoring and insufficient information acquisition regarding actual beneficiaries and performed transactions.
Using businesses registered in off-shore areas and complex transaction schemes, Norvik Banka clients (2013-2014) and Rietumu Banka clients (2009-2015) transferred money from their accounts in circumvention of international sanctions imposed against North Korea.
It should be noted that FCMC found similar violations in three other Latvian commercial banks. This June, administrative agreements were signed and fines were applied. FCMC reported information about the findings publicly.
FCMC Chairman Peters Putnins: “International cooperation offers FCMC more and more opportunities for in-depth investigation of complex schemes. Measures put in place there is a lesson to all Latvian commercial banks so that they can avoid suspicious schemes. They have to seriously reconsider their internal control systems in line with NILLTFN and international sanctions. This announcement shows that Latvia has stable and secure legislation.”
In addition to the target inspections, FCMC also performed searches over at Norvik Banka and Rietume Banka. Those searches were aimed at checking the banks’ internal control system. FCMC concluded that Norvik Banka and Rietumu Banka allowed violations to be committed because they lacked sufficient control systems.
Both banks cooperated with FCMC and promised to fix the problems.
FCMC has fined the banks for a total amount of EUR 2,891,271, which is to be transferred to the state budget.
Fines were calculated for both banks based on what was discovered during inspections, FCMC reports. (BNN/Business World Magazine)
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