Banking system in Latvia and current market situation
As it is known, the banking system of Latvia is one of the most advanced within the EU countries. Banks provide a full range of corporate services: settlement and cash services, foreign exchange services and lending, deposits, trusts and investments. The customers of Latvian Bank can be served in any of 3 languages: Russian, English and Latvian. Starting from year 2018, one of the most relevant and discussed topics is money laundering. The story began with the fact that the second largest Bank in Latvia, ABLV, was accused of bribing officials, money laundering and involvement in the situation related to North Korea. ABLV Bank stayed without the support of the ECB and the Bank of Latvia and had to self-liquidate. This situation caused a great stir, and Moneyval put forward a list of recommendations for еру financial supervisory authorities to streamline the financial sector and to minimize the risk of money laundering. At the moment, this topic is at the peak of its popularity, and the result of the fight against the “dirty money” has become the reduction of the non-resident portfolio by more than 70%. The resident (Latvian) companies, which are owned by non-residents, as well as non-residents as individuals, have come under attack. The companies’ and individuals’ accounts are closed despite the completely transparent and understandable activities, the lack of communication with offshore jurisdictions and the actual payment of taxes. The concept of non-resident is now “suspicious“, and its activities are “doubtful”, which is an excuse for closing the existing account and refusing to open a new one.