Latvia’s financial watchdog said on Wednesday it had fined PrivatBank, the country’s 12th-biggest bank, 1 million euros ($1.1 million) for insufficient money-laundering controls.
The Financial and Capital Market Commission (FCMC) said in an emailed statement it had found a number of “serious faults in the internal control system in the area of anti-money laundering and terrorist financing at the bank.
PrivatBank used to serve mainly non-resident clients from Russia and other CIS countries. It is part-owned by troubled Ukrainian lender PrivatBank, which is being nationalized.
“The Bank’s management respects the FCMC conclusions, takes them into consideration and undertakes to completely eliminate the stated faults, improving the internal control system of the Bank,” it said in an emailed comment.
The FCMC, which has already twice over the past four years fined PrivatBank for similar reasons, said it ordered the bank to provide it with a plan for how to address the issues, and to get an independent assessment of its internal controls.
The Latvian government has proclaimed rebuilding the country’s banking sector’s tarnished reputation a priority after it was hard hit by scandals in recent years.
In July, the watchdog fined Rigensis Bank, which also mainly serves non-resident clients from CIS countries, for lax money- laundering controls.
The country’s central bank governor, a top policymaker at the European Central Bank whose term in office ends in late December, is accused of accepting bribes and money laundering. He denies the charges and is to appear in court on Nov. 4.