The Latvian Financial and Capital Market Commission fined local lender AS PrivatBank €1 million for lacking adequate money laundering control systems, Reuters reported, citing a statement from the regulator.
The regulator said it identified a number of "serious faults" in PrivatBank's internal control system regarding anti-money laundering and terrorist financing, according to the report. The Latvian bank used to mainly serve nonresident clients from Russia and other countries in the Commonwealth of Independent States.
PrivatBank said its management respects the regulator's conclusions and it is committed to eliminate the identified deficiencies and improve its internal control system, according to a Sept. 18 statement. The Latvian lender noted that the regulator's decision will not affect its customers and its everyday activities.
The lender added that it continues to actively implement best international practice of anti-money laundering procedures and standards, following stricter requirements to such standards and in response to the general situation in the Latvian banking sector.
Latvia's parliament passed a bill in June to strengthen control over the FCMC, which had come under fire for being "too soft" on banks, allowing it to appoint and terminate the financial regulator's board. The country has been looking to speed up the restructuring of its banking sector following the large-scale money laundering scandal at local lender ABLV Bank AS.
In 2017, the FCMC also fined PrivatBank €35,575 for alleged violations of international sanctions against North Korea, after the regulator identified weaknesses in customer due diligence and transaction monitoring of the bank.
Ukraine's JSC CB PrivatBank currently holds a 46.54% stake in the Latvian bank, according to S&P Global Market Intelligence data.
