Latvia Country Summary

FATF Status

Latvia is not on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The latest Follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Latvia was undertaken in 2026. According to that Evaluation, Latvia was deemed Compliant for 13 and Largely Compliant for 26 of the FATF 40 Recommendations. It was also deemed Highly Effective for 5 and Substantially Effective for 5 with regard to the 11 areas of Effectiveness of its AML/CFT Regime

Latvia continues to grapple with significant issues related to corruption and organized crime, with persistent perceptions of corruption affecting various sectors, including politics and the judiciary. Despite these challenges, the government has implemented several anti-corruption laws and initiatives, such as the establishment of the Corruption Prevention and Combating Bureau (KNAB), aimed at enhancing transparency and public participation in combating corruption.

In terms of criminal markets, Latvia faces threats from human trafficking, arms trafficking, and drug-related crimes, with organized crime groups exploiting the country's strategic location for illicit activities. While there are efforts to improve the resilience of law enforcement and the judicial system, challenges remain, including limited financial resources and public trust, which hinder effective crime prevention and enforcement measures.

Latvia, a small Baltic nation and EU member, has positioned itself as a strategic transportation and logistics hub, facilitating access to both the EU market and Central Asia. The government actively encourages foreign investment through liberal economic policies, special economic zones, and tax incentives, while ensuring that foreign investors enjoy the same rights as local ones. However, challenges such as a shortage of skilled labor, high energy costs, and concerns over transparency in public procurement processes continue to affect the investment climate, alongside geopolitical tensions that have contributed to recent economic contractions.