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The Council of Latvijas Banka has adopted several legal acts today, thereby improving the regulatory framework of the sector of purchasing and selling cash foreign currencies. Amendments to the regulatory framework of the sector of purchasing and selling cash foreign currencies were necessary in relation to the amendments to the Law on the Prevention of Money Laundering and Combating the Financing of Terrorism and Proliferation and the Law on International Sanctions and National Sanctions of the Republic of Latvia adopted by the Saeima on 13 June 2019. Therefore, Latvijas Banka continues to improve the regulatory framework governing the areas under its supervision pursuant to the requirements of the updated provisions relating to the anti-money laundering and combating the financing of terrorism and proliferation (production, storage, transportation, use or dissemination of potential weapons of mass destruction).

Amendments to Regulation No. 36 "Regulation for Purchasing and Selling Cash Foreign Currencies" of Latvijas Banka of 13 May 2009 have been made.

The amendments specify the objective of licensing the purchase and sale of cash foreign currencies, stating that the objective also includes ensuring the execution of restrictions imposed by Latvian national sanctions. Provisions concerning the requirements in the field of anti-money laundering and combating the financing of terrorism have been extended to cover also combating the financing of proliferation and ensuring the implementation of the restrictions imposed by international and Latvian national sanctions.

The right to apply the administrative sanctions and supervisory measures laid down in the Law on International Sanctions and National Sanctions of the Republic of Latvia has been conferred to the Licensing Committee of Latvijas Banka.

New regulations "Requirements for Anti-Money Laundering and Combating the Financing of Terrorism and Proliferation and Sanction Risk Management in Purchasing and Selling Cash Foreign Currencies" have been laid down.

The new regulations replace Regulation No. 158 "Requirements for the Prevention of Laundering the Proceeds from Criminal Activity (Money Laundering) and of Terrorism Financing in Purchasing and Selling Cash Foreign Currencies" of Latvijas Banka of 30 October 2017.

In addition to the provisions set out in the previous regulation, the new regulations contain provisions relating to the establishment and control of an internal control system for sanction risk management in capital companies having received a licence from Latvijas Banka for purchasing and selling cash foreign currencies. The new regulations specify the sanction risk, the factors affecting the sanction risk capital companies should take into account when assessing the respective risk, the actions to be taken within sanction risk management when performing customer due diligence and supervision of transactions. An efficient system for the prevention of the relevant risks plays an important role in the fight against crime as well as in forging reputation of the financial and non-financial sectors and the country at international level.

In compliance with the requirements of the Law on the Prevention of Money Laundering and the Financing of Terrorism and Proliferation, the requirements in the field of anti-money laundering and combating the financing of terrorism and proliferation binding on the capital companies having received a licence issued by Latvijas Banka have been updated. The above law stipulates a more elaborated regulation of the procedure for the identification of the beneficial owner and for an enhanced customer due diligence, subject to the most significant changes. 

For reference

Latvijas Banka, acting in the public and economic interest, carries out several tasks significant for each and every inhabitant, financial markets and the public at large:

– participates in the formulation and implementation of the euro area's monetary policy;
– issues cash in Latvia and participates in ensuring the cash circulation process in the euro area;
– discharges the function of the central national currency authentication centre;
– maintains the interbank payment systems' infrastructure and promotes their smooth operation;
– manages the foreign reserves and other financial investments;
– acts as the financial agent of Latvia's government and provides financial services to other market participants;
– compiles and publishes financial, monetary statistics and balance of payments statistics;
– maintains and develops the Credit Register;
– acts as an advisor to the Parliament and Cabinet of Ministers of the Republic of Latvia on monetary policy issues and other issues related to Latvijas Banka's operation.

Latvijas Banka promotes analysis and research of macroeconomic and financial issues, thereby laying a secure foundation for professional activities in these areas. The role of the leading industry expert helps Latvijas Banka raise public awareness of the development of the economy and the monetary system, the current situation and the economic policy being pursued. Latvijas Banka takes an active part in educating the general public on various economic topics.