Latvia’s Office for Prevention of Laundering of Proceeds Derived from Criminal Activity (FID) reports having received a total of 6 384 reports of suspicious deals in 2022, which is 11.4% more when compared with 2021. Additionally, FID froze a total of EUR 357 million in suspicious funds. This includes EUR 351 million in liquidated credit institutions.
Acting chief of FID Toms Platacis says the number of reports kept going down before the year 2020. However, the number of reports has been on a rise since 2021. Approximately one thousand reports received in recent years are from liquidated credit institutions.
«Those reports do not detail existing transactions, rather the risks associated with Latvia as a regional financial centre, which is something our country has been since the start of 2019. Now the biggest challenge is working with cases that surface here and the illegal finances that are generated in Latvia. The main risks are here are related to tax crimes, corruption, illegal circulation of excise goods, fraud and sanctions,» said Platacis.
He said criminal procedures are initiated over 99% of FID’s received reports on money laundering. «Of the EUR 357 million that we froze last year, EUR 342 million were later arrested. Information regarding the remaining amount is being compiled now,» said Platacis.
He said the objective for FID is 20-30 very high risk or complexity cases in the next five years.
As for the volume of frozen funds, Platacis predicted it will go down in the future, considering that more and more cases involving funds of liquidated banks are submitted to courts of law.
«If we look at the period of time Latvia positioned itself as a regional financial centre, the typical situation was that money came in, stayed for maybe a day, and was then transferred to other countries.
This flow mostly went from the East to the West. If this money of the now liquidated financial institutions wasn’t kept frozen, it would likely disappear from our and EU’s focus. This means there is nothing else we can do than freeze this money and transfer information to law enforcement institutions,» explained Platacis.
More and more FID takes notice of local financial crimes. Measures like freezing financial resources will not be necessary any more, because in this case this is less about money kept on bank accounts and more about real estate property, vehicles and property registered on names of relatives, said Platacis.
«There is no risk of this money disappearing and us being unable to enforce them in favour of victims or the state.
This is why the volume of frozen funds will likely go down. The volume of funds law enforcement institutions and courts will recover, is unlikely to experience such a sharp decline,» said the head of FID.
When asked which monitored sector has the biggest volume of locally acquired illegal funds, Platacit said work is underway to assess nation-wide risks.
«Risk assessment indicates the biggest risks are currently associated with the grey economy. This is not about EUR 100 paid in the form of envelope wages, rather large-scale dealings – VAT carousel and big schemes. Then there is corruption, illegal distribution of excise goods, large-scale fraud and sanctions,» admits the head of FID.
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