Customer due diligence requirements, in the context of anti-money laundering regulations in Latvia.

Abstract

This thesis investigates the problem of Latvian banks’ discriminatory habits towards non-residents in the context of anti-money laundering (AML) regulations, a practice which could have a negative impact on direct foreign investments in Latvia. The main objective of this study is to determine if the problem derives from legal norms or from banks’ arbitrary decisions. The research method is doctrinal legal research. The main conclusions are that Latvian AML legislation is partially aligned with FATF recommendations, therefore future restrictions should be expected. Analysis of the know your customer and due diligence requirements showed an absence of discrimination against non-residents. Certain state functions, including the creation of norms, are currently delegated to banks. This practice opens the possibility of challenging some existing norms in court; however, in the case of a favorable decision, the impact would be incremental