_________________________________________________________
US State Dept Narcotics Report 2011 (introduction):
No report available
_________________________________________________________
US State Dept Trafficking in Persons Report 2011 (introduction):
Latvia is a source country for women, men, and children subjected to sex
trafficking and forced labor. Latvian women are forced into prostitution in
Italy, Spain, Ireland, Greece, Cyprus, the Netherlands, and Germany.
Latvian men and women have been subjected to conditions of forced
labor in the United Kingdom and there were anecdotal reports that
Latvian men may have been subjected to conditions of forced labor in
Sweden. In prior years, there were unofficial reports that some Latvian
teenage girls were subjected to sex trafficking within the country.
The Government of Latvia does not fully comply with the minimum
standards for the elimination of trafficking; however, it is making
significant efforts to do so. During the reporting period, the government
established an intra-governmental coordination mechanism and began
to develop policies to combat labor trafficking. The government also
sustained funding for victim assistance despite government-wide budget
cuts and developed improved procedures to identify victims of trafficking.
The government demonstrated progress in prosecuting and convicting
trafficking offenders, though the majority of convicted trafficking
offenders continued to avoid punishment that included jail time.
Moreover, none of the investigations opened in the last year involved
suspected labor trafficking. In the coming year, the government should
improve its response to labor trafficking, use its intra-governmental
mechanism to further strengthen and clarify victim identification
procedures, and empower all anti-trafficking actors to share information
with each other and the public.
For full report click here
_________________________________________________________
US State Dept Terrorism Report 2009
In May, the Cabinet of Ministers approved an action plan for responding
to terrorist threats and attacks on people or objects in Latvia’s territory.
In September, Latvia established a working group to develop an action
plan for terrorist or pirate attacks against Latvian ships anywhere in the
world. The Transportation Ministry is currently developing legislation to
control hazardous cargo and is developing an action plan to respond to
emergency situations related to hazardous cargo. Latvia regularly
participates in the European Union’s Terrorism Working Group.
In October, the Counterterrorism Center of the Latvian Security Police
and the Riga International Airport organized a counterterrorism exercise
that simulated a plane hijacking and hostage situation. Representatives
from the Security Police, Riga International Airport, Civil Aviation Agency,
State Border Guards, State Police, State Fire and Rescue Service,
Center of Emergency and Disaster Medicine, and the Prosecutor
General’s Office participated.
As of December, Latvia was contributing 170 soldiers to support the
International Security Assistance Force in Afghanistan, including an
Operational Mentoring and Liaison Team. Latvia’s Financial Intelligence
Unit maintained a terrorist financing database that it shared with local
banks.
_________________________________________________________
Links:
Worldwide AML Legislation (International Bar Association)
US State Dept Narcotics Report 2011 (introduction):
No report available
_________________________________________________________
US State Dept Trafficking in Persons Report 2011 (introduction):
Latvia is a source country for women, men, and children subjected to sex
trafficking and forced labor. Latvian women are forced into prostitution in
Italy, Spain, Ireland, Greece, Cyprus, the Netherlands, and Germany.
Latvian men and women have been subjected to conditions of forced
labor in the United Kingdom and there were anecdotal reports that
Latvian men may have been subjected to conditions of forced labor in
Sweden. In prior years, there were unofficial reports that some Latvian
teenage girls were subjected to sex trafficking within the country.
The Government of Latvia does not fully comply with the minimum
standards for the elimination of trafficking; however, it is making
significant efforts to do so. During the reporting period, the government
established an intra-governmental coordination mechanism and began
to develop policies to combat labor trafficking. The government also
sustained funding for victim assistance despite government-wide budget
cuts and developed improved procedures to identify victims of trafficking.
The government demonstrated progress in prosecuting and convicting
trafficking offenders, though the majority of convicted trafficking
offenders continued to avoid punishment that included jail time.
Moreover, none of the investigations opened in the last year involved
suspected labor trafficking. In the coming year, the government should
improve its response to labor trafficking, use its intra-governmental
mechanism to further strengthen and clarify victim identification
procedures, and empower all anti-trafficking actors to share information
with each other and the public.
For full report click here
_________________________________________________________
US State Dept Terrorism Report 2009
In May, the Cabinet of Ministers approved an action plan for responding
to terrorist threats and attacks on people or objects in Latvia’s territory.
In September, Latvia established a working group to develop an action
plan for terrorist or pirate attacks against Latvian ships anywhere in the
world. The Transportation Ministry is currently developing legislation to
control hazardous cargo and is developing an action plan to respond to
emergency situations related to hazardous cargo. Latvia regularly
participates in the European Union’s Terrorism Working Group.
In October, the Counterterrorism Center of the Latvian Security Police
and the Riga International Airport organized a counterterrorism exercise
that simulated a plane hijacking and hostage situation. Representatives
from the Security Police, Riga International Airport, Civil Aviation Agency,
State Border Guards, State Police, State Fire and Rescue Service,
Center of Emergency and Disaster Medicine, and the Prosecutor
General’s Office participated.
As of December, Latvia was contributing 170 soldiers to support the
International Security Assistance Force in Afghanistan, including an
Operational Mentoring and Liaison Team. Latvia’s Financial Intelligence
Unit maintained a terrorist financing database that it shared with local
banks.
_________________________________________________________
Links:
Worldwide AML Legislation (International Bar Association)
|
|
Sanctions:
None applicable
____________________________________________________
Offshore Jurisdiction Blacklists:
Information unavailable.
____________________________________________________
US State Department Money Laundering Report - 2012:
Latvia is a regional financial center that has a large number of
commercial banks with a sizeable non-resident deposit base.
Total bank deposits have increased in the past year, with non-
residential deposits increasing by 17% and comprising 41% of
total bank deposits (as of August 2011).
In August 2006, the United States issued a Final Rule under
Section 311 of the USA PATRIOT Act, imposing a special
measure against the VEF Banka, as a financial institution of
primary money laundering concern. The bank was found to lack
adequate AML/CFT controls and was used by criminal elements to
facilitate money laundering, particularly through shell companies.
The Latvian authorities subsequently closed the bank, and on
August 1, 2011, the Final Rule was rescinded.
Local officials do not consider proceeds from illegal narcotics to
be a major source of laundered funds in Latvia, despite the
interception of a record 80 kilograms of hashish at the Latvian-
Russian border in early September. Authorities report that the
primary sources of money laundered in Latvia are tax evasion;
organized criminal activities, such as prostitution, tax evasion, and
fraud, perpetrated by Russian and Latvian groups; as well as
other forms of financial fraud. Officials report that questionable
transactions and the overall value of money laundering have
remained below pre-financial crisis levels. Latvian regulatory
agencies closely monitor financial transactions to identify
instances of terrorist financing.
Public corruption remains a problem in Latvia. This year, the
Corruption Prevention and Combating Bureau (KNAB) initiated
proceedings against several public officials for financial fraud,
including money laundering. For example, an official of the
Ministry of Finance was charged with bribing an official of the
State Revenue Service (SRS) to allow illegal activities. In another
instance, an assistant head of a Latvian-owned bank was
arrested for allegedly demanding a 50,000 LVL (approximately
$100,000) bribe in return for a favorable loan.
There is a black market for smuggled goods (primarily cigarettes,
alcohol and gasoline); however, contraband smuggling does not
generate significant funds that are laundered through the
financial system. In the first nine months of 2011, confiscation of
smuggled goods has increased several fold over 2010 figures
(494% more fuel has been seized so far).
Four special economic zones provide a variety of significant tax
incentives for manufacturing, outsourcing, logistics centers, and
the transshipment of goods to other free trade zones. These
zones are located at the free ports of Ventspils, Riga, and
Liepaja, and in the inland city of Rezekne near the Russian and
Belarusian borders. The zones are covered by the same
regulatory oversight and enterprise registration regulations that
exist for other areas. In 2011, the SRS uncovered the largest
fraud case in the history of the Riga Free Port; the criminal
investigation into tax evasion and smuggling is ongoing.
Do Financial Institutions engage in currency transactions related
to international narcotics trafficking that include significant
amounts of U.S. currency; currency derived from illegal sales in
the U.S.; or that otherwise significantly affect the U.S.: No
Criminalization of Money Laundering:
“All serious crimes” approach or “list” approach to predicate
crimes: All crimes approach
Legal persons covered: criminally: YES civilly: YES
Know-your-customer (KYC) rules:
Enhanced due diligence procedures for PEPs: Foreign: YES
Domestic: NO
KYC covered entities: Banks, credit institutions, life insurance
companies, intermediaries, private pension fund administrators,
investment brokerage firms and management companies,
currency exchange offices, and money transmission or remittance
offices; tax advisors, external accountants, and sworn auditors;
sworn notaries, advocates, and other independent legal
professionals; trust and company service providers; real estate
agents or intermediaries; organizers of lotteries or other gambling
activities; persons providing money collection services; EU-owned
entities; and any merchant, intermediary or service provider,
where payment for goods or services is accepted in cash in an
amount equivalent to or exceeding 15,000 EUR (approximately
$20,000)
Suspicious Transaction Reporting (STR) Requirements:
Number of STRs received and time frame: 15,467 from January 1
through October 31
Number of CTRs received and time frame: 10,961 from January 1
through October 31
Note: Number of CTRs includes both cash transactions and other
unusual transactions, as per the Latvian Law.
STR covered entities: Banks, credit institutions, life insurance
companies, intermediaries, private pension fund administrators,
investment brokerage firms and management companies,
currency exchange offices, and money transmission or remittance
offices; tax advisors, external accountants, and sworn auditors;
sworn notaries, advocates, and other independent legal
professionals; trust and company service providers; real estate
agents or intermediaries; organizers of lotteries or other gambling
activities; persons providing money collection services; any
merchant, intermediary or service provider, where payment for
goods or services is accepted in cash in an amount equivalent to
or exceeding 15,000 EUR (approximately $20,000); and public
institutions
Money Laundering Criminal Prosecutions/Convictions:
Prosecutions: 39 persons prosecuted for 85 crimes from January
1 through October 31, 2011
Convictions: Six cases with final court judgments and eight
convicted persons from January 1 through October 31, 2011
Records exchange mechanism:
With U.S.: MLAT: YES Other mechanism: YES
With other governments/jurisdictions: YES
Latvia is a member of the Committee of Experts on the Evaluation
of Anti-Money Laundering Measures and the Financing of
Terrorism (MONEYVAL), a Financial Action Task Force (FATF)-
style regional body. Its most recent mutual evaluation report can
be found here:
http://www.coe.int/t/dghl/monitoring/moneyval/Countries/Latvia_en.
asp
Enforcement and implementation issues and comments:
In 2011, Latvia adopted beneficial ownership disclosure
amendments which require shareholders owning 25% of shares or
more to submit data identifying the natural person behind the
shareholder. The latest amendments of the AML/CFT Law simplify
customer due diligence, add payment services providers and
electronic money institutions to the list of entities subject to the
Law, and clarify the definition of “financial institutions.” Finally, the
AML/CFT Law now extends to EU-owned entities and requires
their compliance with the Latvian laws related to customer
identification, due diligence, and record keeping.
Under Latvian law, foreign politically exposed persons (PEPs) are
always subject to enhanced due diligence procedures. Current
laws do not require enhanced due diligence procedures for
domestic PEPs, however they allow discretion to any institution or
professional covered by KYC rules to apply enhanced due
diligence, based on its risk assessment for a particular customer.
Latvian officials have cooperated with USG law enforcement
agencies to investigate numerous financial narcotics-related
crimes. The Latvian Financial and Capital Market Commission
(FCMC) regularly exchanges information with the U.S. Securities
and Exchange Commission. More broadly, officials in Latvia are
also able to provide assistance outside of the formal mutual legal
assistance process in accordance with the current AML/CFT laws.
Total assets seized by law enforcement officials in money
laundering cases was approximately 177,000 LVL (approximately
$347,000), a decrease from 2010.
“Internet phishing” crimes have increased from 67 in 2010 to 223
in the first ten months of 2011. The value of these transactions
remains small and does not significantly contribute to money
laundering. However, authorities are concerned that Latvian
youth are allegedly used by the German and Dutch phishing
hackers as “money mules,” allowing their bank accounts to serve
as conduits for illicit money.
Latvia has comprehensive AML/CFT laws and regulations. The
scope of the “shadow” (untaxed) economy (estimated at around
40% of the overall economy), geographic location, and public
corruption make it challenging to combat money laundering.
Despite these difficulties, Latvian law enforcement officials and
regulators are making progress. FCMC reports that Latvian banks
have substantially invested in their IT systems to design programs
for identifying suspicious activities, especially with regard to high-
risk clients. FCMC is committed to strengthen its capacity by
increasing its human and financial resources, specifically for AML
purposes. FCMC has also drafted a memorandum of
understanding for cooperation with U.S. Commodity Futures
Trading Commission and is awaiting the Commission’s reply.
None applicable
____________________________________________________
Offshore Jurisdiction Blacklists:
Information unavailable.
____________________________________________________
US State Department Money Laundering Report - 2012:
Latvia is a regional financial center that has a large number of
commercial banks with a sizeable non-resident deposit base.
Total bank deposits have increased in the past year, with non-
residential deposits increasing by 17% and comprising 41% of
total bank deposits (as of August 2011).
In August 2006, the United States issued a Final Rule under
Section 311 of the USA PATRIOT Act, imposing a special
measure against the VEF Banka, as a financial institution of
primary money laundering concern. The bank was found to lack
adequate AML/CFT controls and was used by criminal elements to
facilitate money laundering, particularly through shell companies.
The Latvian authorities subsequently closed the bank, and on
August 1, 2011, the Final Rule was rescinded.
Local officials do not consider proceeds from illegal narcotics to
be a major source of laundered funds in Latvia, despite the
interception of a record 80 kilograms of hashish at the Latvian-
Russian border in early September. Authorities report that the
primary sources of money laundered in Latvia are tax evasion;
organized criminal activities, such as prostitution, tax evasion, and
fraud, perpetrated by Russian and Latvian groups; as well as
other forms of financial fraud. Officials report that questionable
transactions and the overall value of money laundering have
remained below pre-financial crisis levels. Latvian regulatory
agencies closely monitor financial transactions to identify
instances of terrorist financing.
Public corruption remains a problem in Latvia. This year, the
Corruption Prevention and Combating Bureau (KNAB) initiated
proceedings against several public officials for financial fraud,
including money laundering. For example, an official of the
Ministry of Finance was charged with bribing an official of the
State Revenue Service (SRS) to allow illegal activities. In another
instance, an assistant head of a Latvian-owned bank was
arrested for allegedly demanding a 50,000 LVL (approximately
$100,000) bribe in return for a favorable loan.
There is a black market for smuggled goods (primarily cigarettes,
alcohol and gasoline); however, contraband smuggling does not
generate significant funds that are laundered through the
financial system. In the first nine months of 2011, confiscation of
smuggled goods has increased several fold over 2010 figures
(494% more fuel has been seized so far).
Four special economic zones provide a variety of significant tax
incentives for manufacturing, outsourcing, logistics centers, and
the transshipment of goods to other free trade zones. These
zones are located at the free ports of Ventspils, Riga, and
Liepaja, and in the inland city of Rezekne near the Russian and
Belarusian borders. The zones are covered by the same
regulatory oversight and enterprise registration regulations that
exist for other areas. In 2011, the SRS uncovered the largest
fraud case in the history of the Riga Free Port; the criminal
investigation into tax evasion and smuggling is ongoing.
Do Financial Institutions engage in currency transactions related
to international narcotics trafficking that include significant
amounts of U.S. currency; currency derived from illegal sales in
the U.S.; or that otherwise significantly affect the U.S.: No
Criminalization of Money Laundering:
“All serious crimes” approach or “list” approach to predicate
crimes: All crimes approach
Legal persons covered: criminally: YES civilly: YES
Know-your-customer (KYC) rules:
Enhanced due diligence procedures for PEPs: Foreign: YES
Domestic: NO
KYC covered entities: Banks, credit institutions, life insurance
companies, intermediaries, private pension fund administrators,
investment brokerage firms and management companies,
currency exchange offices, and money transmission or remittance
offices; tax advisors, external accountants, and sworn auditors;
sworn notaries, advocates, and other independent legal
professionals; trust and company service providers; real estate
agents or intermediaries; organizers of lotteries or other gambling
activities; persons providing money collection services; EU-owned
entities; and any merchant, intermediary or service provider,
where payment for goods or services is accepted in cash in an
amount equivalent to or exceeding 15,000 EUR (approximately
$20,000)
Suspicious Transaction Reporting (STR) Requirements:
Number of STRs received and time frame: 15,467 from January 1
through October 31
Number of CTRs received and time frame: 10,961 from January 1
through October 31
Note: Number of CTRs includes both cash transactions and other
unusual transactions, as per the Latvian Law.
STR covered entities: Banks, credit institutions, life insurance
companies, intermediaries, private pension fund administrators,
investment brokerage firms and management companies,
currency exchange offices, and money transmission or remittance
offices; tax advisors, external accountants, and sworn auditors;
sworn notaries, advocates, and other independent legal
professionals; trust and company service providers; real estate
agents or intermediaries; organizers of lotteries or other gambling
activities; persons providing money collection services; any
merchant, intermediary or service provider, where payment for
goods or services is accepted in cash in an amount equivalent to
or exceeding 15,000 EUR (approximately $20,000); and public
institutions
Money Laundering Criminal Prosecutions/Convictions:
Prosecutions: 39 persons prosecuted for 85 crimes from January
1 through October 31, 2011
Convictions: Six cases with final court judgments and eight
convicted persons from January 1 through October 31, 2011
Records exchange mechanism:
With U.S.: MLAT: YES Other mechanism: YES
With other governments/jurisdictions: YES
Latvia is a member of the Committee of Experts on the Evaluation
of Anti-Money Laundering Measures and the Financing of
Terrorism (MONEYVAL), a Financial Action Task Force (FATF)-
style regional body. Its most recent mutual evaluation report can
be found here:
http://www.coe.int/t/dghl/monitoring/moneyval/Countries/Latvia_en.
asp
Enforcement and implementation issues and comments:
In 2011, Latvia adopted beneficial ownership disclosure
amendments which require shareholders owning 25% of shares or
more to submit data identifying the natural person behind the
shareholder. The latest amendments of the AML/CFT Law simplify
customer due diligence, add payment services providers and
electronic money institutions to the list of entities subject to the
Law, and clarify the definition of “financial institutions.” Finally, the
AML/CFT Law now extends to EU-owned entities and requires
their compliance with the Latvian laws related to customer
identification, due diligence, and record keeping.
Under Latvian law, foreign politically exposed persons (PEPs) are
always subject to enhanced due diligence procedures. Current
laws do not require enhanced due diligence procedures for
domestic PEPs, however they allow discretion to any institution or
professional covered by KYC rules to apply enhanced due
diligence, based on its risk assessment for a particular customer.
Latvian officials have cooperated with USG law enforcement
agencies to investigate numerous financial narcotics-related
crimes. The Latvian Financial and Capital Market Commission
(FCMC) regularly exchanges information with the U.S. Securities
and Exchange Commission. More broadly, officials in Latvia are
also able to provide assistance outside of the formal mutual legal
assistance process in accordance with the current AML/CFT laws.
Total assets seized by law enforcement officials in money
laundering cases was approximately 177,000 LVL (approximately
$347,000), a decrease from 2010.
“Internet phishing” crimes have increased from 67 in 2010 to 223
in the first ten months of 2011. The value of these transactions
remains small and does not significantly contribute to money
laundering. However, authorities are concerned that Latvian
youth are allegedly used by the German and Dutch phishing
hackers as “money mules,” allowing their bank accounts to serve
as conduits for illicit money.
Latvia has comprehensive AML/CFT laws and regulations. The
scope of the “shadow” (untaxed) economy (estimated at around
40% of the overall economy), geographic location, and public
corruption make it challenging to combat money laundering.
Despite these difficulties, Latvian law enforcement officials and
regulators are making progress. FCMC reports that Latvian banks
have substantially invested in their IT systems to design programs
for identifying suspicious activities, especially with regard to high-
risk clients. FCMC is committed to strengthen its capacity by
increasing its human and financial resources, specifically for AML
purposes. FCMC has also drafted a memorandum of
understanding for cooperation with U.S. Commodity Futures
Trading Commission and is awaiting the Commission’s reply.
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| Further Tables |
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*Please note that FATF deems that a country has significant aml deficiencies if any
of the 'Core' Recommendations, R1, R5, R10, R13, SRII, or SRIV are rated either
Partially of Non-Compliant. These are marked in red.
For FATF to remove a country from the regular follow-up process, it has to be rated
Compliant or Largely Compliant in the above mentioned Core Recommendations
and the following Key Recommendations: -
R3, R4, R23, R26, R35, R36, R40, SRI, SRIII, SRV
Please also note that any risk assessment should take into consideration all
follow-up reports.
of the 'Core' Recommendations, R1, R5, R10, R13, SRII, or SRIV are rated either
Partially of Non-Compliant. These are marked in red.
For FATF to remove a country from the regular follow-up process, it has to be rated
Compliant or Largely Compliant in the above mentioned Core Recommendations
and the following Key Recommendations: -
R3, R4, R23, R26, R35, R36, R40, SRI, SRIII, SRV
Please also note that any risk assessment should take into consideration all
follow-up reports.
| LATVIA |
| KnowYourCountry |
|
|
| Last Updated: 16 April 2012 |