On Thursday, 13 June, the Saeima supported in the third reading the amendments to the Law on the Prevention of Money Laundering and Terrorism Financing. Amendments were necessary to ensure coherence between Latvian legislation and European Union law, and to eliminate the deficiencies identified in the Moneyval report of 2018.
The annotation of the draft law clarifies that considering the recent trends in money laundering and financing of terrorism, it is crucial to have a more effective system in place for the prevention of money laundering to support the fight against crime and to improve the reputation of our financial sector and the State at international level.
The new title of the law will be the Law on the Prevention of Money Laundering and Terrorism and Proliferation Financing.
The amendments expanded the scope of persons subject to the provisions of the law. The following have been included: insolvency administrators, outsourced accounting service providers, sworn auditors, companies of sworn auditors and tax advisors, as well as any other person who undertakes to provide assistance on tax matters or acts as an intermediary in providing such assistance. The provisions of the amended law will apply also to persons who are dealing in works of art and antiquities, including persons who perform the activities provided for in antique shops, auction houses or ports, if the total value of a transaction or of several apparently linked transactions is EUR 10 000 or more. Besides, it is stipulated that the relevant provisions will be binding also in the course of insolvency or liquidation process.
The Office for Prevention of Laundering of Proceeds Derived from Criminal Activity has been renamed as the Financial Intelligence Unit. The amendments stipulate that from now on reports on suspicious transactions shall be submitted to the Unit.
For the purpose of performing their duties, the subjects of the law and the supervision and control authorities have been granted the right to request and receive information online to and from the registers hosted by the Enterprise Register. Other provisions have been clarified regarding the necessity to evaluate and report on suspicious transactions.
The amendments stipulate that if a credit or financial institution is to terminate the business relationship with a customer, because it has identified risks related with money laundering and financing of terrorism, which are beyond its control, the total amount the institution will be able to pay the customer in cash may not exceed EUR 7 200. According to the annotation, the proposed solution will help to better organise the management of money laundering and financing of terrorism risks, since persons who are in possession of large amounts of money of questionable origin will no longer be able to withdraw it in cash. Moreover, credit and financial institutions are prohibited to open and keep anonymous personal safe deposit boxes.
Meanwhile, to prevent situations where staff who have reported their suspicion regarding money laundering are subject to threats or hostility, a prohibition to persecute such persons or cause them other direct or indirect adverse consequences has been imposed.
Saeima Press Service