Banks, Deposits, Financial Services, Good for Business, Latvia
International Internet Magazine. Baltic States news & analytics
Friday, 29.03.2024, 14:12
Latvian banking sector has gotten rid of undesirable shell companies – regulator
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%.