On 13 December, the Cabinet of Ministers approved the Plan of Measures for the Prevention of the Money Laundering, Terrorism and Proliferation Financing for 2023-2025, which aims to further strengthen Latvia’s capacity to combat money laundering, terrorism and proliferation financing, promoting public security, the competitiveness of the economic environment and confidence in Latvia’s jurisdiction.
The Financial Action Task Force (FATF) experts have acknowledged that Latvia has developed a strong and robust financial crime prevention system and will not be included in the so-called “grey list”.
Although the objective of putting the financial crime prevention system in order and ensuring that Latvia’s anti-money laundering and anti-terrorism and anti-proliferation financing system complies with international requirements has been achieved, work needs to be continued, including with regard to the recommendations made by the FATF experts and further actions to be taken in various fields of action. At the same time, it is underlined that Latvia needs to devote increased attention and resources to combating and preventing domestic corruption.
The plan includes proposals to improve/introduce remote monitoring at the State Revenue Service (SRS), a review of staffing, resources and remuneration at SRS and the Consumer Rights Protection Centre (CRPC) to ensure that they are able to manage the identified risks.
To strengthen the capacity of the Financial Intelligence Unit (FIU) in the field of strategic and operational analysis, 10 permanent posts will be created from 2023 without increasing the total number of posts for the Ministry of the Interior.
The FIU will also acquire virtual asset investigation software to be able to effectively track criminal flows in the virtual environment and to support law enforcement authorities in tracking virtual asset transactions. To promote law enforcement cooperation and the use of innovative technologies for financial crime intelligence and prevention, the FIU opened the first Financial Intelligence and Anti-Money Laundering or AML Innovation Hub in the Baltics on 30 March 2022. Its main function is to serve as a platform for secure and operational cooperation between various Latvian and foreign law enforcement agencies and data centres, using modern and innovative technologies for information exchange and data analysis, as well as to promote scientific research in the field of financial and economic crime prevention. The AML Innovation Centre will increase the efficiency of investigations and crime combating.
It is also planned to modernize the Register of Enterprises of the Republic of Latvia by the end of next year by improving the risk-based approach to verifying the information of beneficial owners in the registration process.
According to the Financial and Capital Market Commission’s 2021 Annual Report, the overall level of money laundering and financing of terrorism and proliferation (ML/TF) risk in the Latvian financial sector has significantly decreased in the most important segments - credit institutions and payment institutions.
The Plan takes into account the findings of the National AML/CFT Risk Assessment Report for 2017-2019, which was finalized at the end of 2020. The Plan takes into account that the rapid and massive increase in sanctions imposed on Latvia as a result of Russia’s war against Ukraine has created significant resource challenges for the public and private sectors in enforcing these sanctions.
The implementation of the Plan will require an additional EUR 2 424 059 from the State budget in 2023, including EUR 448 478 for the Ministry of the Interior (FID); EUR 1 919 406 in 2024, including EUR 995 644 for the Ministry of the Interior (FIU); and EUR 1 900 566 in 2025 and annually thereafter, including EUR 995 644 for the Ministry of the Interior (FIU).
Ministry of the Interior
Communication Department
kn@iem.gov.lv