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Latvian banking sector has gotten rid of undesirable shell companies – regulator

BC, Riga, 02.08.2018.Print version
As at July 7, 2018, the share of high-risk shell companies’ deposits accounted for 0.03% of all deposits held by Latvian banks, representatives of the Financial and Capital Market Commission (FCMC) told, adding that the remaining bad deposits were mostly frozen money, informs LETA.

Peters Putnins. Photo: fktk.lv

FCMC said that the amendments to the Law on the Prevention of Money Laundering and Terrorism Financing that came into effect on May 9 gave the Latvian banks 60 days to severe ties with clients that meet the characteristics of shell companies. The deadline for complying with that requirement is July 7.


“Now we can say with assurance that our banks have done their job. The remaining 0.03%, or EUR 4.5 mln, is the outgoing cash flow, or money frozen in blocked accounts, the origin of which still requires scrutiny. We see that the work started in 2016 is ongoing, with the share of the risky bank clients shrinking each day as banks are terminating their business with shell companies, which is not forbidden but can entail unnecessary risks,” said FCMC chairman Peters Putnins, adding that around 1.5 bln flew away from the Latvian banking sector in the first half of 2018. Further cooperation has been denied to 9,000 shell corporations of various kinds, Puntins said.


At the end of July, the share of non-resident deposits held by Latvian banks, including those made by depositors from the European Union (EU), was 21%, while resident deposits accounted for 79%.

 






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