Latvia’s Financial and Capital Market Commission (FCMC) has identified significant improvements in the internal control systems of the country’s banks in 2020.
Last year, the FCMC conducted AML/CFT inspections of 12 banks. The inspections revealed that the banks had taken significant measures to improve their internal control systems. Notably, compared to previous years, in 2020, there were only a few cases where there was scope for administrative proceedings or sanctions.
In 2020, the FCMC made it its priority to strengthen risk-based AML/CFT approach and contribute to creating awareness of AML/CFT requirements. It also began focusing on a thorough review of the elements of banks’ internal control systems. Due to the rise in banks’ use of remote verification of customer identity, the FCMC also reviewed how banks ensured compliance with Latvia’s regulations on remote identification. In 2021, the FCMC will continue to improve its inspection methodology as well as the application of a risk-based approach to financial institutions.