5.11.2021. Latvia, new participants in financial market – investment platforms

Financial markets around the world are changing rapidly, providing customers with ever new services. One of the fastest growing segments is peer to peer platforms.
This year, the Financial and Capital Market Commission (FCMC) has issued four investment brokerage company licenses to companies that have so far positioned themselves as peer-to-peer platforms: AS Mintos Marketplace, the largest company in this segment in Europe, AS TWINO Investments, SIA DN Operator and SIA Viainvest.
Prior to obtaining the license, these companies were engaged in the business of trading credit claims on creditors on web-based platforms, offering loan investments.
Following the FCMC’s license, companies have been given a transitional period during which they will stop offering investments in loans and will start offering investors financial instruments – debt securities based on loans issued by lenders.
There is no single regulation for this market segment in Europe. Countries have different approaches. One of them focuses on a clear and transparent business model, issuing licenses and monitoring the activities of this segment, which thus provides customers with greater protection.
Companies licensed as investment firms will change their business models, phase out the provision of investments in the form of assignment agreements to both new and existing clients and replace them entirely with the offer of financial instruments.
In the future, investors will be provided with information on investment risks and investment costs.
It is important for investors to know that if an FCMC-licensed investment brokerage company becomes insolvent and fails to meet its obligations, each investor will be entitled to compensation of up to EUR 20,000 in default.

29.10.2021. Update of FATF grey list

FATF Plenary, 19-21 October 2021 updated jurisdictions under incresed monitoring. Mauritius and Bostwana were excluded and three countries: Jordan, Mali and Turkey added.
Now jurisdictions with strategic deficiencies are:
Burkina Faso
Cayman Islands
South Sudan


22.10.2021. International tax competitiveness index rankings 2021

The variety of approaches to taxation among OECD (Organisation for Economic Co-operation and Development) 37 countries creates a need to evaluate these systems relative to each other. For that purpose, the International tax competitiveness index (ITCI) was developed – a relative comparison of OECD countries’ tax systems with respect to competitiveness and neutrality.
According to research from the OECD, corporate taxes are most harmful for economic growth, with personal income taxes and consumption taxes being less harmful.
Taxes on immovable property have the smallest impact on growth.
There are many factors unrelated to taxes which affect a country’s economic performance. Nevertheless, taxes play an important role in the health of a country’s economy.
Countries that rank poorly on the ITCI often levy relatively high marginal tax rates on corporate income.

See all list of countries taxfoundation.org.

15.10.2021. A single EU anti-money laundering rulebook

After multiple directives, several high-profile money laundering scandals, and numerous policy papers – money laundering remains an undiminished threat within the EU.
The European Commission summarises the consequences as follows: criminals and terrorists have a sustained means to jeopardise public security, the incidence of money laundering damages the reputation of jurisdictions, resulting in the withdrawal of financial services, which in turn has negative effects on investment, and damages the EU internal market.
In response, the Commission has recently published a series of proposals which together will address fundamental problems in Europe’s anti-money laundering (AML) regime. They are a new EU Anti-money Laundering Authority (AMLA), a first Anti-Money Laundering Regulation, a sixth Anti-Money Laundering Directive, and new regulations to trace crypto-asset transfers.
These new measures will be good for Malta and EU business in general, as they will simplify cross border financial services, and through harmonisation of standards they will weed out businesses that aggressively seek AML style risks without adequate controls. While Malta’s ‘greylisting’ has put it in the spotlight for ineffective enforcement, the  necessity of the new EU proposals illustrates that Malta is by no means the only jurisdiction which is challenged by this issue.
The new AMLA has a number of ambitious tasks and is given sweeping powers. The most risk-exposed pan-European financial institutions will come under its direct supervision. The new authority will indirectly supervise all other financial institutions through setting expectations, performing assessments, reviewing work programmes, and pressing for supervisory convergence in all member states.

5.10.2021. EU list of non-cooperative jurisdictions for tax purposes

The news EU list of non-cooperative jurisdictions for tax purposes adopted by the Council on 5 October 2021 is composed of:
– American Samoa
– Fiji
– Guam
– Palau
– Panama
– Samoa
– Trinidad and Tobago
– US Virgin Islands
– Vanuatu
There were removed Anguilla, Dominica and Seychlles.