In 2020, Latvia’s Financial and Capital Market Commission (FCMC) carried out 12 AML/CFT inspections of regional banks. The Commission found that the banks had taken significant measures to improve their internal control systems. Interestingly, in the past, most bank inspections ended in administrative proceedings and penalties. Meanwhile, in 2020, such cases were few.
The FCMC’s priorities for 2020 were to strengthen the risk-based approach and improve the general understanding of AML/CFT regulatory requirements. In 2020, the FCMC further focused on a thorough review of the elements of an internal control system. Notably, in 2020, the FCMC imposed fines of 2.03 million euros ($2.43m) on three banks for violations of AML/CFT regulations as well as legal obligations aimed at addressing the deficiencies identified and improving banks’ internal control systems.
Moreover, as the need for remote verification of customer identity by banks has increased, the FCMC also reviewed how banks ensured compliance with the regulations on remote identification. The Commission further identified the best practices and deficiencies in the application of remote identification.