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Sunday 23.02.2020 | Name days: Haralds, Almants

Latvia is doing everything to avoid getting grey-listed, says Kazāks

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Latvia, economy, money laundering, FATF, Moneyval

Bank of Latvia governor Mārtiņš Kazāks

Latvia is doing all it can to avoid a possible negative scenario, when Financial Action Task Force (FATF) may include Latvia on a list of countries found to have strategic problems with money laundering and terrorism financing prevention, otherwise known as the grey list, LETA was told by Bank of Latvia governor Mārtiņš Kazāks.

«Currently Latvia is doing the right thing by focusing on the first scenario – when our country is not added to the list. Latvia does the right thing to avoid the negative scenario. This means not only changes but also explaining them very clearly to partners. This is very important,» says Kazāks.

At the same time, if Latvia is added to the grey list, the finance sector’s ability to support the economy through crediting will be weak. «The finance sector will not be able to enhance Latvia’s economy,» stresses the Bank of Latvia governor.

He said a lot has been done lately in relation to legislation. Changes to legislative acts are very wide; it is rare to find a country that has done something similar.

«It is good to adopt laws, but the question is about is maintaining these laws. This is a very important topic. This does not apply exclusively to the finance sector – it is applicable to the entire economy. The finance sector is simply in the foreground. But this also applies to many different factors – notaries, real estate traders, etc. Origin of money is a very important topic,» said Kazāks.

Read also: IMF: Being slow in combating financial crimes could push Latvia to «grey list»

He also said the topic regarding US Department of the Treasury Office for Foreign Asset Control (OFAC) sanctions against Aivars Lembergs and organizations with ties to him is a good indicator that proves how capable Latvia as a state and its institutions are in resolving this problem.

«We observed lightning-fast and energetic government action, which helped exclude Ventspils Freeport from the list of sanctions,» says Kazāks.

«At the same time, we have to understand that neither Moneyval report nor FATF report expected this February on the decision to add or not to add Latvia to the grey list will put an end to this situation.»

«Money laundering is a matter of everyday hygiene. It will not go away and these assessments are only intermediate stages,» says the governor of the central bank, adding that this is done for Latvia, not anyone else.

«We are doing this for ourselves, because all these problems are an anchor around Latvia’s ankle. It will be better for all of us if we learn to resolve these problems, manage risks and avoid making the mistakes from previous years. If we want Latvia’s economy to grow, we have to get rid of the risks related to money laundering, sanctions and corruption,» says Kazāks.

He also denied the assumption that the recent scandals about money laundering in Latvia, Estonia and Scandinavia could mean there are special problems in this region. This is not a problem typical for just Latvia, Baltic States and Scandinavia. It is simply that our region is one of the first to go through this process. The same awaits other regions.

«Because money laundering is a global problem, we need global solutions. It cannot be resolved on a national level, otherwise money launderers will simply move to another country. This is why I support the initiative from these six countries, including Latvia, to look at money laundering problems regionally and form an institution that would look at these problems on a level of Eurozone and the European Union. A global problem cannot be resolved locally,» says Kazāks.

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