On Tuesday, 30 April, the Cabinet of Ministers approved the “Action Plan for the Prevention of Money Laundering, Terrorism and Proliferation Financing 2024-2026” (hereinafter – the Plan).
The development of the Plan is necessary to ensure that policy planning to prevent money laundering, terrorism and proliferation financing (ML/TPF) is in line with the risks identified in this area.
The Plan has been developed taking into account the findings of the National ML/TPF Risk Assessment Report 2020-2022 (hereinafter – NRA 2023). According to the conclusions of the NRA 2023, the most significant money laundering threats are currently posed by domestic criminal offences, including the shadow economy and related criminal offences, namely tax offences, illicit movement of excise goods and narcotic drugs, including smuggling and other criminal offences.
This Plan implements a risk-based approach to ensure that measures to prevent or mitigate ML/TPF are appropriate to the risks identified.
The objective of the Plan is to strengthen the capacity of Latvia to combat money laundering, terrorist financing and proliferation financing, as well as to monitor the implementation of the requirements of the anti-money laundering and countering the financing of terrorism and proliferation regime and to reduce overall risks. This ensures compliance with international obligations and standards in the area of ML/TPF and promotes national and international security, the competitiveness of the economic environment and confidence in the jurisdiction of Latvia.
In addition, it should be underlined that the Russian war in Ukraine and the related EU sanctions have significantly increased the burden on Latvian institutions responsible for the enforcement of sanctions, detection of violations and prosecution of individuals. In such circumstances, the effectiveness of Latvia’s ML/TPF policy is closely linked to national and EU security.
The Plan has been developed in line with the National Strategy for Preventing and Combating Financial Crime, which includes:
- Strengthening national and EU security by ensuring effective enforcement of international and national sanctions;
- Identification and recovery of proceeds of crime. Identifying the proceeds of crime and confiscating or returning them to their victims is one of the most important objectives not only in the fight against crime, but also in ensuring the rule of law, competitive markets and entrepreneurship.
- Strengthening the ML/TPF system through digital transformation;
- Strengthening the international reputation of Latvia as a country that prevents the use of its financial system for ML/TPF in line with international standards and EU laws and regulations.
- Ensuring proportionality of ML/TPF requirements to promote competitiveness, including strengthening an inclusive financial system that promotes fair competition and strengthens public-private partnerships to prevent ML/TPF.
The Plan includes new measures such as replacing the International Criminal Justice Information System with a new shared platform; reducing the risks of anonymity and fraud in the process of face-to-face identification of customers of financial and non-financial institutions; and enhancing the technological capacity of the State Police for effective money laundering investigations, including data analytics; strengthen the material and technical support of the State Revenue Service; raise public awareness of digital fraud by organized crime groups; develop proposals for necessary amendments to the Law on Sanctions, clarifying reporting requirements for the circumvention and violation of international and national sanctions.
The Cabinet of Ministers has designated the Financial Sector Development Council as the responsible body for coordinating the implementation of the tasks set out in the Plan.
The institutions responsible for the action lines of the Plan have been instructed to coordinate and monitor the implementation of the measures set out in the Plan and to submit to the Ministry of the Interior information on the progress of implementation of the measures in accordance with the areas of responsibility specified in the Plan at least semi-annually.
Prepared by
Communication Department