Last updated: 01/07/2014
CENTRAL AUTHORITY FOR REPORTING
Monitoring Office, Office for the Prevention of Laundering of Proceeds Derived from Criminal Activity.
ANTI-MONEY LAUNDERING REGULATOR(S)
The Financial and Capital Market Commission in respect of banks and other financial institutions;
The Latvian Council of Sworn Advocates in respect of sworn advocates;
The Latvian Council of Sworn Notaries in respect of sworn notaries;
The Latvian Association of Certified Auditors in respect of sworn auditors and commercial companies of sworn auditors;
The Ministry of Transport in respect of state-owned stock company “Latvijas Pasts” (Latvian Post);
The Bank of Latvia in respect of licenced currency exchange offices;
Lotteries and Gambling Supervisory Inspection in respect of organisers of lotteries and gambling;
The State Inspection for Heritage Protection in respect of transactions with the items included in the list of state protected monuments of cultural heritage;
State Revenue Service in respect of:
1. Tax advisors, external accountants;
2. Independent legal professionals when they act in the name of their clients to assist in the planning or execution of a transaction, participate in any transaction, perform other professional activities related to transactions or confirm a transaction for the benefit of the client, and the transaction involves:
a. Buying or selling real estate or an enterprise;
b. Managing a customer’s money, financial instruments and other funds;
c. Opening or managing all kinds of accounts with credit institutions or financial institutions;
d. Creating, managing or ensuring the operation of legal arrangements, making investments necessary for creating, managing or ensuring the operation of legal arrangements;
3. Legal arrangements and company service providers;
4. Persons acting in the capacity of agents or intermediaries in real estate transactions;
5. Other legal or natural persons trading in real estate, transport vehicles and other articles, acting as intermediaries in such transactions or providing services in relation to such transactions, where the payment is made in cash and the amount 15 000 euros or more, whether the transaction is made as a single operation or several linked operations;
6. Persons trading in precious metals, precious stones and the articles thereof, as well as acting as intermediaries in the abovementioned transactions.
ARE LAWYERS COVERED BY ANTI-MONEY LAUNDERING LEGISLATION?
HAS THE THIRD EU MONEY LAUNDERING DIRECTIVE BEEN IMPLEMENTED? IF NOT, WHEN IS IT EXPECTED TO BE IMPLEMENTED?
Yes, the Third Money Laundering Directive (2005/60/EC) is implemented in Latvian AML law – the Law on the Prevention of Legalisation (Laundering) of Proceeds from Crime and Terrorism Financing. Unofficial translation of the law is available at: http://www.fktk.lv/texts_files/AML_law_engl__January_2010.pdf
LIST THE LAWS REGARDING ANTI-MONEY LAUNDERING, INDICATING WHICH LAWS ARE APPLICABLE TO LAWYERS
The Law on the Prevention of Legalisation (Laundering) of Proceeds from Crime and Terrorism Financing
Regulations of Cabinet of Ministers No.1071 “On list of features of an unusual transaction and procedure for reporting unusual and suspicious transactions”
The Criminal Law
Guideline of the Latvian Bar Association “Procedure for setting measures to be carried out to procure fulfilment of requirements set by the Law on the Prevention of Legalisation of Proceeds from Crime and Terrorism Financing”.
ARE VISITING LAWYERS SUBJECT TO LOCAL LAWS REGARDING ANTI-MONEY LAUNDERING, AND, IF SO, TO WHAT EXTENT?
To the extent the visiting lawyer provides services which are described in answer to the question “OTHER ANTI-MONEY LAUNDERING REGULATOR(S)” who become subject to supervision of the State Revenue Service then they would be subject to Latvian laws and regulations.
LIST ANY MONEY LAUNDERING GUIDANCE FOR LAWYERS (FOR EXAMPLE, LAW SOCIETY OR BAR ASSOCIATION GUIDELINES) CURRENTLY IN PLACE.
There is an instruction issued by Guidelines of the Latvian Bar Association “Procedure for setting measures to be carried out to procure fulfilment of requirements set by the Law on the Prevention of Legalisation of Proceeds from Crime and Terrorism Financing approved by decision No 221 of the Latvian Council of Sworn Advocates dated 15 December 2009”.
IS THE LAW SOCIETY/BAR ASSOCIATION INVOLVED IN SUPERVISING OR ENFORCING COMPLIANCE WITH ANTI-MONEY LAUNDERING REGULATIONS?
The Latvian Council of Sworn Advocates is involved in supervising sworn advocates in Latvia.
DESCRIBE CLIENT DUE DILIGENCE REQUIREMENTS, INCLUDING WHEN IT MUST BE UNDERTAKEN BY LAWYERS
Chapter III of the Law on the Prevention of Legalisation of Proceeds from Crime and Terrorism Financing (the Law) provides identification, due diligence, enhanced due diligence, determination of beneficial owner, or the client and other requirements applicable to the subjects of the law (including lawyers).
DOES YOUR COUNTRY FOLLOW A RISK-BASED APPROACH TO CLIENT DUE DILIGENCE BY LAWYERS?
Yes, Article 17 of the Law provides a risk-based approach to client due diligence.
ARE THERE ENHANCED DUE DILIGENCE MEASURES FOR CERTAIN TYPES OF CLIENTS, FOR EXAMPLE, POLITICALLY EXPOSED PERSONS?
Yes, mandatory enhanced due diligence is required for politically exposed persons in cases when a business relationship is not established face-to-face and also for cross-border correspondent banking relationships. Banks and financial institutions have to perform enhanced due diligence also in cases indicated in the Regulations for Enhanced Customer Due Diligence issued by the Financial and Capital Market Commission.
ARE THERE SIMPLIFIED DUE DILIGENCE MEASURES FOR CERTAIN TYPES OF CLIENTS, FOR EXAMPLE, LISTED COMPANIES?
Yes, Article 26 of the Law provides simplified due diligence measures for certain types of clients, inter alia, listed companies.
ARE LAWYERS PERMITTED TO RELY ON THIRD PARTY DUE DILIGENCE? IF YES, PLEASE DESCRIBE.
Yes, lawyers (as well as other addresees of the Law) are permitted to rely on third party due diligence. Article 29 of the Law provides that a party has the right to recognise and accept outcomes of such customer identification and due diligence which have been performed in the EU Member States or third countries, which impose requirements in the field of the prevention of money laundering and terrorism financing consistent with the requirements provided for in the Law, by credit institutions and financial institutions (other than capital companies carrying out buying and selling of foreign currency in cash and payment institutions). This provision, however, does not cancel the obligation thereof to carry out a lawyer’s own monitoring of the customer’s business relationships.
WHEN IS A LAWYER UNDER AN OBLIGATION TO REPORT SUSPICIOUS TRANSACTIONS?
A lawyer is under an obligation to report without delay any financial transaction characterised by one or more of the indicators of unusual transactions. The Cabinet of Ministers has issued Regulations (No.1071) “on a list of features of an unusual transaction and procedure for reporting about unusual and suspicious transactions” which provides indicators of unusual transactions in line with FATF recommendations.
DOES ATTORNEY/CLIENT PRIVILEGE AND/OR DUTIES OF CONFIDENTIALITY PROVIDE A DEFENCE OR PARTIAL/TOTAL EXCEPTION TO THE REQUIREMENT TO REPORT SUSPICIOUS TRANSACTIONS?
Yes, Article 30 of the Law provides exemptions from application of the Law in cases when the attorneys defend or represent their customers in pre-trial criminal proceedings or judicial proceedings or advise on instituting or avoiding judicial proceedings.
DOES LOCAL LAW PROVIDE ANY CRIMINAL AND/OR CIVIL INDEMNITY TO A LAWYER WHO HAS REPORTED A SUSPICIOUS TRANSACTION?
Yes, the Law provides disclosure/reporting requirements as well as release of the party from criminal/civil responsibility.
ONCE A SUSPICIOUS TRANSACTION REPORT HAS BEEN FILED, IS A LAWYER ALLOWED TO PROCEED WITH THE LEGAL ADVICE/TRANSACTION, AND, IF SO, MUST CONSENT FROM AUTHORITIES BE OBTAINED FIRST?
A lawyer would be free to proceed with the legal advice/transaction after the respective report was submitted, unless the lawyer decides to refrain from executing the transaction or the Monitoring Office issues an order to stop the transaction.
IS THERE A TIPPING-OFF PROHIBITION? IF YES, PLEASE DESCRIBE.
Yes, Articles 38 and 39 provide prohibition to disclosure (with certain exemptions for exchanging information, e.g., within the same group) and permission to disclose the reported fact if a party decided to refrain from executing the transaction or the Monitoring Office has issued an order to stop the transaction.
DESCRIBE ANY RESTRICTIONS ON ACCEPTING A NEW CLIENT
An unidentified client may not be accepted. The Law requires a new client be identified prior to performing an individual transaction, without establishing a business if:
1) the amount of the transaction or the total amount of several transactions which appear to be linked is equivalent to or exceeds EUR 15,000;
2) the transaction conforms to at least one of the features included in the list of features of unusual transactions, or suspicions have aroused regarding money laundering or terrorism financing or an attempt to carry out such actions; or
3) there are doubts about the veracity of the previously obtained customer identification information.
ARE THERE ONGOING MONITORING REQUIREMENTS FOR EXISTING CLIENTS? IF YES, PLEASE DESCRIBE.
Article 20 of the Law provides ongoing monitoring requirements for existing clients taking as a basis the assessment of money laundering and terrorism financing risk.
DESCRIBE ANY OTHER WAYS IN WHICH LAWYERS ARE AFFECTED BY ANTI-MONEY LAUNDERING LEGISLATION.
HAVE LAWYERS IN YOUR JURISDICTION BEEN IMPLICATED IN MONEY LAUNDERING, INCLUDING ANY TYPE OF COMPLAINT, ARREST OR PROSECUTION?
Information not available.
HAS THE FINANCIAL ACTION TASK FORCE (FATF) CONDUCTED A MUTUAL EVALUATION OF THIS COUNTRY, AND, IF SO, WHAT WERE THE FINDINGS CONCERNING LAWYERS’ COMPLIANCE WITH THE FATF 40+9 RECOMMENDATIONS?
No information available.
Latvian AML Law - http://likumi.lv/doc.php?id=178987
Latvian Regulations - http://likumi.lv/doc.php?id=185793
Information provided by:
Mr Egons Pikelis
Mr Valters Diure
Elizabetes 15, Riga, LV-1010, Latvia
T. +371 67814848
F. +371 67814849