Prime Minister Krišjānis Kariņš on June 13 swiftly commended the Latvian Saeima’s passing of major reforms to financial sector supervision.
Within hours of the votes in parliament Kariņš said: “These ambitious reforms are a big step forward in our fight against money laundering, the financing of terrorism and arms proliferation. These measures demonstrate our unbending political will to make further changes in the financial sector as quickly as possible and to become a leader in transparency and governance in EU. I call on all EU Member States to strengthen our mutual cooperation on dealing with financial crime and to work more closely and effectively together in the future.”
With the measures, Latvia will have implemented the EU’s 5th Anti-Money Laundering Directive six months ahead of the deadline for Member States.
As previously reported by LSM, the most eye-catching aspect of the reforms, which were pushed through parliament in a mater of months, mean that the Members of the board of the Financial and Capital Market Commission (FKTK), including the chairman, will be appointed by the Latvian Parliament. This change has been the subject of strenuous opposition from the regulator itself, which alleges political interference in its work.
The measures will also enable Latvia to impose sanctions approved by the United Nations Security Council more rapidly. Latvian authorities will no longer have to wait for EU mechanisms to transpose sanctions.
Since Kariņš took over the premiership in February this year, he has made the rapid clean-up of the financial sector his number one priority. Over the previous decade Latvia earned an unenviable reputation as a global money-laundering hub with more than a dozen boutique banks processing questionable transactions involving secretive offshore companies and dirty money mainly from the former CIS countries.
The government said it will complete the remaining measures in its overhaul of financial sector regulation by the end of 2019.