On Tuesday 1 December, the Cabinet of Ministers (CoM) considered the amendments to the Law on the Prevention of Money Laundering and Terrorism and Proliferation Financing drafted in line with the Moneyval experts’ assessment of Latvia's progress in implementing technical recommendations and ensuring the compliance with the recommendations of the Financial Action Task Force (FATF) regarding the assessment of compliance of the true beneficiaries of the subjects of the law. The amendments aim to simplify the system for reporting suspicious transactions and to further develop a system based on the risks associated with the prevention of money laundering.
The draft law lays down the conditions for establishing a systemic and structured solution – the development of a shared customer research tool (shared KYC utility). The shared customer research tool enables the subjects of the law to begin sharing their customer research data by placing them on the platform also outside the scope of the consolidated group – in the shared customer research tool. The tool will help to more efficiently exchange the information obtained in customer research. At present, credit institutions and financial institutions have the right to recognise and accept the results of customer research conducted by another credit institution or financial institution and, by introducing a common customer research tool, the exchange of customer research information will become more convenient and efficient, while reducing the administrative burden on credit institutions, financial institutions and others.
It is planned to substantially change the current reporting system for the submission of information to the Financial Intelligence Service (FID) from 1 July 2021. The goAML application – a fully integrated software solution specifically developed for financial intelligence services, which provides for data collection, processing, analysis, document management, workflow and statistical functions, is expected to be introduced.
In addition, by promoting the functionality of the suspicious transaction reporting system the current parallel reporting arrangements will be removed. As a result of the introduction of the new reporting system, it will be possible to submit information on suspicious tax transactions via a single channel, by submitting a report on suspicious tax transactions to the FID that will immediately send it to the State Revenue Service.
In order to promote the compliance with international standards and to ensure that criminals and their counterparts cannot become or be the true beneficiaries of the subjects of the law – legal entities and legal arrangements – (with a significant or controlling participation), as well as to become or be the subjects of the law, the amendments set out eligibility requirements for the true beneficiaries of the subjects of the law and subjects of the law – natural persons. The draft law sets out a requirement for an impeccable reputation and impunity of these individuals.
The draft law is available on the website of the Cabinet of Ministers. The Saeima will decide on the amendments to the law.