The Latvian banks aren’t allowed to service shell-companies

On April 26th, 2018 the Sejm of Latvia adopted amendments to the Law Anti-Money Laundering.

In opinion of the Latvian Ministry of Finance amendments have been aimed at eliminating money laundering through Latvian system. Also they will be applied for that financial institutes in client’s base of which shell companies are dominated.

The innovations include the prohibition of servicing shell-companies for payment organizations, electronic payment systems, investments brokers, client’s stock portfolio management companies and investment funds with opened membership which can issue shares for investment companies.

According to the Article 1, clause 15 of the Law, shell-company is a legal entity which has one or several of the following characteristics:

- There is no connection of the legal entity with the actual economic activity or the activity of the legal entity creates little activity or doesn’t create any economic value;

- In the country in which the legal entity is registered, the regulations don’t oblige the company to prepare and submit financial reports to the competent supervisory authorities;

- There is no place of activity (premises) in the country of incorporation.

On materials of the following website: http://www.saeima.lv/en/news/saeima-news/26811-saeima-prohibits-banks-to-service-shell-companies