Latvia’s Financial and Capital Market Commission (FCMC) has decided to levy a fine of 906,610 euros (over $1 million) on Signet Bank AS for violation of AML/CFT regulations. FCMC has also ordered the bank to meet various legal obligations, including an action plan for addressing deficiencies and an independent review of the internal control system and its compliance with AML regulations.
The FCMC conducted an on-site inspection of Signet Bank AS to evaluate its AML framework and its compliance with AML requirements related to customer due diligence and transaction monitoring. During the inspection, the FCMC found that the bank failed to take necessary steps to confirm the identity of the beneficial owner during customer due diligence. The bank also failed to verify and document the source of the funds in its customers’ accounts. Furthermore, the bank did not pay attention to suspiciously large and complex transactions.
The bank’s explanations for its deficiencies point to the management’s failure to aptly understand the nature of irregularities and the need to modify its approach. The FCMC has thus made it clear that the bank must comply with laws not only for the authorities, but because it wants to address the AML risks.
The FCMC requires the bank to assess its AML-related internal controls and improve their efficacy. The Bank must also share with the FCMC its action plan to address the identified violations. Additionally, the Bank must perform an independent assessment of its internal controls and compliance with the help of a sworn auditor.