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Latvian banking regulator conducts inspections on anti-money laundering controls

Xinhua, November 24, 2016 Adjust font size:

The Latvian banking regulator has been conducting sweeping inspections at all Latvian-based banks in recent months, examining their compliance with the law on the prevention of money-laundering and terrorism financing, the Finance and Capital Market Commission said in a statement.

The banking regulator's representative Laima Auza said that the scheduled inspections at Latvia's credit institutions were intended to ensure a constant supervision of the banks' internal control systems and procedures.

The latest inspection at Swedbank Latvia has revealed serious flaws in the bank's internal control systems, which reportedly have failed to ensure a proper oversight of clients' transactions and detection of suspicious deals, the regulator said in a statement.

The Finance and Capital Market Commission has therefore imposed a 1.36-million-euro (about 1.44 million U.S. dollars) fine on Swedbank, which under an administrative settlement with the regulator has promised to take a number of measures to deal with the issues in its control system.

As part of these measures, Swedbank will stop providing services to nonresident clients that are posing money laundering risks.

Swedbank described these clients as a "limited group of legal entities", the majority of which are registered in countries with low tax rates.

During the first three quarters of this year the Finance and Capital Market Commission conducted 22 various inspections at banks.

As a result of these inspections, several banks have been penalized for non-compliance with the anti- money-laundering and terrorism financing regulations.

In March, the commission fined Baltic International Bank with 1.1 million euros and the bank's CEO with 25,000 euros. In May, a fine of 3.17 million euros was imposed on ABLV Bank and its managers were reprimanded for flaws in the bank's control systems. In July, a fine of 305,000 euros was charged on Latvijas Pasta Banka. (1 euro = 1.06 U.S. dollars) Endit