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Latvia’s finance market supervisor applies one million euro fine to Rigensis Bank

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RULatvia’s Finance and Capital Market Commission (FCMC) has decided to apply a fine of one million euros to Rigensis Bank AS for violating money laundering and terrorism financing prevention regulations, as confirmed by the commission.

It has also been decided to issue a warning to the Renārs Degro, the bank’s board member responsible for the aforementioned field, for failing to ensure the bank meets requirements and performs necessary actions to prevent the bank’s involvement in violations of regulations.

Rigensis Bank’s applied fine is 80% of the maximum amount outlined by the law – 10% of the bank’s total annual turnover. The bank has one month to transfer funds to the state budget, FCMC explains.

The bank has also been given a number of tasks to perform, report to FCMC on prevention of uncovered violations, as well as perform an independent assessment of its internal control system and client base.

FCMC performed inspections at the bank. During those inspections the bank assessed transactions all the way to February 2019. Inspections helped reveal a number of violations associated with internal control system, client base risks and its management. The commission explains that violations point to serious problems with the bank’s internal control system. The bank had not created an appropriate internal control system that would ensure effective compliance with regulations.

Rigensis Bank had not performed sufficient activities to make sure the reported beneficiary is the client’s true beneficiary. In multiple cases, the bank had failed to identify the origin of the money owned by clients or perform quality inspection of clients.

The commission adds that Rigensis Bank’s internal control system does not provide constant evaluation of clients across their entire period of cooperation.

On top of that, the commission believes the bank had not appropriately evaluated risks associated with clients and had not followed clients’ unusually large, complicated and mutually linked transactions seemingly lacking justifiable reasons and accompanying documents.

Rigensis Bank had failed to acquire and assess information to uncover possible shell companies, FCMC explains.

FCMC concluded that Rigensis Bank had not ensured effective internal control system’s function in a way that would allow the bank to comply with requirements of the law. On top of that, uncovered violations are considered significant and lasting. Nevertheless, FCMC does welcome the bank’s movement towards fixing the problems uncovered by the commission.


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