27 November 2018 during the session of Saeima (legislative body of Latvia) it was informed that the international interbank system of telecommunications and payments SWIFT has proclaimed Latvia as a high risk country that resulted in sufficient slowdown of all transactions in this system.
This circumstance is primarily connected with Moneyval’s (the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism of the Council of Europe) report on Latvia. This report states that the implementation of anti-money laundering measures in Latvia lacks efficacy so that Latvia may be included in the “grey list” of Moneyval if it does not eliminate the defects during the next year.
Thus, SWIFT transactions that are used mainly for settlements with foreign counterparties have slowed down sufficiently. First of all, this is applicable to operations of Latvian residents that involve some sufficient amounts of money or irregular transactions, where enhanced verification must be made by SWIFT operational specialists. It is informed that the operations that previously took one day now can be processed up to one week.
The slowdown is especially noticed in transactions between Latvian residents and their counterparties from Russia and CIS countries. As for today, the exact terms of change of current regime of SWIFT transactions’ verification to the standard one is not known, but it is very likely that such will happen only during the next year when Moneyval and Financial Actions Task Force (FATF) will evaluate the progress of Latvia in control of its financial sector.
The members of Saeima discussed measures that will possibly improve the financial sector’s state and highlighted one measure, the creation of special committee that will be responsible for monitoring of this sector. This measure has been chosen because the main weakness of anti-money laundering in Latvia is the enforcement of the law, as the national anti-money laundering legislation in Latvia is appropriate from the point of view of the majority of international requirements.
Also, the timeframes for improvement of financial sector in whole and the anti-money laundering in particular have been established during the mentioned session of the Saeima. The result must be achieved by the 3rd quarter of 2019.