Infographic: The FCMC continues to work actively in the field of financial crime prevention

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The Financial and Capital Market Commission (FCMC) continues to work actively in the field of financial crime prevention, providing effective measures to ensure that Latvian financial institutions are not used for money laundering and other unauthorized activities. During recent years, Latvia has significantly changed its approach and has achieved high efficiency and standards in the supervision of the financial sector.

In 2021, the FCMC continues its efforts to promote a common understanding of market participants on the application of requirements for anti-money laundering and counter-financing terrorism and proliferation (AML/CFTP) requirements, ensuring dialogue with market participants, organising various events and developing guidance, as well as improving the regulatory framework. To strengthen the quality of supervision, a change in the approach to inspections has been introduced and the methodology improved, the skills and knowledge of employees are being improved, as well as IT tools are used more effectively. The FCMC will also continue to develop the Baltics & Nordic supervisory platform and actively participate in the experience exchange with supervisors from other countries.

In 2020, the FCMC ensured the AML/CFTP supervision, as well as strengthened the effective implementation of the risk-based approach. Many steps were taken to strengthen the risk-based approach:

  1. recommendations were developed for the establishment of the internal control system for AML/CFTP and sanctions risk management and customer due diligence;
  2. guidance on basic accounts and on the actual beneficiary of associations was prepared and published;
  3. dialogue with market participants was ensured;
  4. IT solutions for risk management and approach to the assessment of bank risks were improved;
  5. a financial sector risk assessment was developed.

In addition, the approach to inspections had been changed, further basing on an assessment of 10 elements of internal control system

The level of risk has decreased in major segments – credit institutions and payment institutions. All banks were subject to inspection with regard to compliance with requirements for remote identification. One horizontal inspection and 12 on-site inspections were carried out in banks, resulting in fines imposed on banks only on three occasions for the total amount of EUR 2.03 million.

Over the previous four years, the banks have significantly decreased their risk levels. Currently, there are 14 banks in Latvia, four of which have a medium-low or low risk level, seven – medium-high, and three banks are established as high-risk banks. At the end of 2020, Latvia’s banks accounted for 85% of deposits from Latvia, 12% from the European Union, 3% – from the CIS and 2% from other countries. Compared to 2015, the share of deposits from Latvia has increased by 36%, while deposits from other countries have shrunk by 24%.


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