The Status of Money Laundering Enforcement in Latvia

The Latvian parliament (Seimas) successfully passed comprehensive money-laundering legislation on June 1, 1998. Since the passage of the legislation, however, the Latvian government has failed to establish an effective anti-money-laundering regime. Consequently, no money-laundering cases have been prosecuted in Latvian courts, and no illicit proceeds have been forfeited through judicial action. The lack of prosecutions has not gone unnoticed by Western financial regulators, and the international community has repeatedly criticized the Latvian government for failing to implement money-laundering legislation. In an attempt to quell criticism from the United States and the European Union (EU), the Central Bank of Latvia adopted new guidelines in mid-July 2000, including a number of recommendations for developing better methods for identifying suspicious transactions. These non-binding resolutions were deemed inadequate by the European community, and in late January 2001, the Council of Europe issued a report that sharply criticized the Latvian government for making “insufficient efforts in combating money-laundering” and strongly recommended legislative reform, bureaucratic re-structuring, and special training for Latvian investigators…[more]