STOCKHOLM Nov 30 Several Latvian banks that
cater mainly to non-residents lack sufficient quality control of
clients and have issues with money laundering, an independent
investigation by three U.S. consulting companies revealed on
The Baltic country's financial watchdog commissioned the
report earlier this year to tackle money laundering issues
mainly in its non-resident banks as the country faced increasing
criticism before joining the Organisation for Economic
Co-operation and Development (OECD) in July.
"We have to admit the fact that there is a lot of work to do
and the situation in some areas ... is rather unstable," said
Peteris Putnins, head of the Financial and Capital Market
Commission, adding that the results were better than initially
The report, which examined 12 Latvian non-resident banks and
was carried out by Navigant Consulting, Exiger, and Lewis Baach
Kaufmann Middlemiss, concluded there was insufficient quality
control of clients and that the structure of shareholders
prevented independent internal audits in some of the banks.
The report also showed an unreasonably simplified assessment
of client risk and irregularities in reporting on suspicious
The watchdog did not name the banks that were affected but
said it expects them to solve the issues and improve their
internal controls by the end of 2017.
Almost half of all deposits held in Latvian banks, just
under 10 billion euros ($10.60 billion), are from foreigners,
mainly from Russia and other former Soviet Union countries.
($1 = 0.9436 euros)
(Reporting by Gederts Gelzis; Editing by Johan Ahlander/Jeremy