Banks, EU – Baltic States, Financial Services, Latvia

She said that there is a risk that Latvia might not be able to complete all Moneyval’s tasks in due time, and the government formation process took longer than expected, which means that implementation of these tasks was on standby. “They have not disappeared from the agenda. It is one think to deal with non-resident banking, another thing is money laundering and tax evasion. Latvia has not dealt with the value added tax (VAT) fraud schemes. Court decisions are made slowly. It will be a challenge to solve it,” she said.

She said that much has been done already, but there are a number of areas where there have been no improvements, including the judicial system, control of sanctions.

“It is important for the new government, including the prime minister and the Finance Ministry to act with determination. Communication is also important – how we communicate the things we have done, do we explain our performance to international experts,” she said.

If Latvia is included in the “grey list”, a part of correspondent banks and international institutions will consider Latvia a risk zone. It is also a serious risk for the country’s reputation and attraction of investments.

As reported, Moneyval has placed Latvia in enhanced follow-up procedure because of the number of Low and Moderate ratings awarded for Effectiveness. Two areas were considered to have low levels of effectiveness - relevant beneficial ownership information and preventing proliferation financing.