Latvian banks to collect data on PEP for anti-money laundering purpose

By the end of this year all Latvians with bank accounts will receive questionnaires which they will have to fill in so that the banks can identify politically exposed persons (PEP) as required by recently adopted anti-money laundering legislation, representatives of Latvian commercial banks said at a news conference Monday.

At the end of 2015, there were 2,056,317 personal accounts in Latvian banks, according to information from the Association of Latvian Commercial Banks.

Amendments to the Latvian law on the prevention of money laundering and terrorist financing, which the parliament adopted in February, expanded the definition of politically exposed persons, making watchdogs focus their attention not only on politicians and public officials, but also their relatives, friends and business partners. The banks have been told to screen their clients in order to identify these connections.

With the help of their questionnaires, the banks expect to identify about 200,000 clients with PEP connections, Swedbank representative Vadims Frolovs said at the news conference.

He said that initially it was projected that there might be an estimated 500,000 bank clients connected with PEPs in Latvia, but updated estimates suggested that the figure was more likely to be closer to 200,000.

Kristaps Markovskis, a representative of the Latvian banking regulator the Financial and Capital Markets Commission, told reporters that the new anti-money laundering amendments, which the regulator drew up in collaboration with the Finance Ministry, are intended to help crack down on politically influential persons who abuse their authority to legalize illicit proceeds.

The amendments have been passed in compliance with an EU directive, the regulator's representative explained.

Martins Bicevskis, president of the Association of Latvian Commercial Banks, called on bank clients to provide all the information asked in the questionnaires.

Asked about the possible consequences of providing false information, the association's president said that the banks would report such cases to the relevant authorities.

Bicevskis said that the screening of bank clients will ensure transparency in the financial sector and will facilitate its cooperation with the public sector.