As many as 17 percent of businesses in Latvia have considered moving their bank accounts abroad as authorities in the Baltic country are tightening the supervision of banks in a bid to combat money laundering and terrorist financing, local media reported on Thursday, citing a survey by SKDS pollster.
In the survey, entrepreneurs and the wider public were asked to give their opinion about the recent overhaul of the Latvian financial system, initiated last year by Prime Minister Krisjanis Karins after several Latvia-based banks were accused of non-compliance with anti-money laundering and counter-terrorist financing rules.
Notably, in the wake of the collapse of Latvia’s third largest bank ABLV over violations of anti-money laundering rules in February 2018, new legislation was passed banning banks from serving the so-called shell corporations.
While 17 percent of respondents in the survey said the close attention that they had felt from supervisory authorities had caused them to consider relocating their bank accounts abroad, 28-29 percent of entrepreneurs said that their business operations had been impeded in one way or other by increased controls.
Approximately one in three respondents described the new compliance requirements as restricting their personal freedoms and, to a certain degree, even humiliating.
A selected group of entrepreneurs who had taken loans or concluded lease agreements with banks in the past year were asked if banks were indeed toughening their requirements. Around 67 percent agreed that the requirements had become stricter and banks were scrutinizing their clients more thoroughly than before.