In November 2016, Navigant Consulting Inc., Exiger LLC and Lewis Baach Kaufmann Middlemiss, US consulting companies, carried out an independent audit of 12 Latvian banks focused on services for non-residents. The audit was related to the compliance with US anti-money laundering regulations.
While Latvian credit institutions are subject to Latvian and EU laws and regulations the US decided to audit them for the compliance with the US regulations to improve the relations between Latvian banks and US correspondent banks and to enhance confidence in Latvian banking organizations as reliable and well-trusted partners by leading global financial institutions.
The audit of those banks focused on services for non-residents was aimed at improving the capability of Latvian banks to efficiently tackle with money laundering and to ensure compliance with the highest standards in the sphere. This is one more step in the course of Latvia’s development as a regional financial center.
Following the audit the Financial and Capital Markets Commission (the FKTK) concluded that the banks that provide services for non-residents should improve their internal controls and monitoring of clients’ transactions based on the individual risk model.
It was agreed that the banks employ too simple procedure to assess clients’ risks and that they should carry out a more extensive review of clients’ transactions and their economic justification as well as to ensure more comprehensive documents be prepared following such reviews and more accurate accounts be submitted as to any decisions made. It was also confirmed that there is no comprehensive control and reviews of clients’ commercial activities. The banks are to identify any risks even before opening an account to a client.
The FKTK intends to remove any omissions and introduce respective procedural changes, subject to expert recommendations, before the end of 2017. This is crucial for the long-term and stable development of the financial services industry and especially for their export, in other words to be able to provide services for international clients.
So, in 2017 we are expecting changes in bank account opening procedures. We will keep you update.