Latvian Financial Regulator Slammed By US Treasury

by Glen Shapiro, LawAndTax-News.com, New York

02 June 2005

Speaking on Tuesday following meetings with senior Latvian officials in Riga, Stuart Levey, the US Treasury's under-secretary for Terrorism and Financial Intelligence, warned that the country's financial regulator must take a more public stand against banks known to be vulnerable to money laundering activity.

In April, the US Treasury named Multibanka and VEF Banka (both of which deny any wrongdoing) as key money laundering concerns, and is reportedly concerned by the Financial and Capital Market Commission's failure to take any action against them beyond placing them under "enhanced supervision".

Mr Levey observed in his statement that:

"Both the United States Government and the Latvian Government are committed to working together to safeguard the international financial system from abuse. My meetings with senior officials from the Prosecutor General's Office, the Financial and Capital Markets Commission, the Bank of Latvia, the Latvian State Police, the commercial banking sector and notably with Prime Minister Kalvitis were positive and productive."

"Latvia has taken many important steps to combat money laundering and corruption in the financial sector. Prime Minister Kalvitis has shown strong leadership on this issue. I am also encouraged by the Saeima's recent passage of an anti-money laundering law. This is a vital move that will not only help protect Latvia's financial sector, but also reaffirms the Latvian Government's commitment to these issues."

"However, there is still important progress to be made. I encourage the Latvians to swiftly and credibly implement the new anti-money laundering law. I look forward to seeing significant results come to fruition as a result of both this legislation and the ongoing efforts of Latvian law enforcement and regulatory authorities."

"The US Treasury Department's recent designation of two Latvian banks as "primary money laundering concerns" reflects the importance to the US Government of having the systems and oversight in place to keep corrupt funds from flowing through the Latvian, as well as the international, financial system."

"The United States and Latvia have forged a strong partnership in many areas, including, notably, our commitment to combating money laundering and financial crime. Continued collaboration and cooperation will only enhance this relationship. The Bush Administration will continue to work with Latvia to help rid its financial sector of illicit funds as we continue to battle the scourge of money laundering worldwide."

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