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Latvia’s Signet Bank hit with near €1 Million fine over AML regulations

By Elizabeth Hearst

A Latvian bank has been fined nearly €1 Million as a result of breaches in anti-money laundering and counter terrorism regulations. 

Latvia’s Signet Bank was slapped with a €906,610 fine by the Board of the Financial and Capital Market Commission (FCMC) after the Commission carried out a number of spot checks on the bank and identified breaches in the bank’s internal control system, customer base risks and risk management. 

The Commission maintains that there was a lack of due diligence in Signet Bank, who allegedly failed to certify the origin of financial means in customer accounts, customer due diligence and transaction monitoring and failed to classify individual customers as shell companies in line with AML regulation requirements. 

Signet Bank is accused of not establishing an AML internal control system adequate to the operational risks that would ensure AML risk management was operating effectively in the bank. 

“The FCMC concludes that the Bank does not recognize the infringements and agrees to make changes to its conclusions only because of the opinion of the FCMC,” a statement from the FCMC read. 

As a result of this inspection Signet Bank must submit an action plan to “address the breaches and shortcomings identified” to the FCMC, who said, “The Bank has to assess its internal control system in the field of AML and improve its functioning and effectiveness”.

This action plan must address the breaches in AML regulations and the bank’s future policy in order to rectify these breaches. Signet Bank is also required to undertake an independent assessment with a sworn auditor in relation to compliance and assessment of the efficiency of the bank’s internal control system. 

Robert Idelsons, CEO of Signet Bank described the fine as “not pleasant news for the Bank”, and said that “Signet Bank is continually working on its systems of internal controls for AML/CTPF, striving to ensure full compliance with industry standards and best practices”. 

Signet Bank is the second smallest bank in Latvia, according to reports published in 2019, and registered €744,000 in profits in 2019. 

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