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Persons with a criminal record will not be allowed to provide financial services

Saeima Chancellery.
Saeima’s Budget and Finance Committee unanimously decided to submit for review amendments to the Credit Institutions Law that provide for realization of multiple measures to enhance Latvia’s financial system and ensure its long-term stability, as reported by Saeima’s press-service.

‘Law amendments are important because they include major restrictions that could affect people’s rights for employment and property, as well as personal data protection. Because of that, we agreed while discussing the project that institutions involved in the process will secure clarifications for the second reading so that it is possible for the Saeima to approve amendments in the final reading,’ said the committee’s chairman Jānis Vucāns.

The legislative draft provides that persons with a criminal record or ongoing insolvency process will not be allowed to participate in provision of financial services. This restriction is planned to improve society’s trust in the finance sector and prevent appearance of illegalities in credit institutions, as mentioned in the legislative draft’s annotation.

It is planned that credit institutions will have the right to perform background checks of their employees and potential employees, as well as request relevant information from the Penalties Registry, if data for those people is available there.

Amendments to the Credit Institutions Law are planned to establish restrictions for shareholders to be board member and take post in the credit institution’s management. Shareholders with major influence over the credit institution will not be allowed to work in its management board regardless if their influence is direct or no. The threshold for the level of influence is planned to be set at 10% of capital or voting rights. This amount already signifies a person’s desire and ability to influence a credit institution’s operations, as noted in the annotation by Finance Ministry.

To further enhance combating of grey economy, amendments to the law are planned to expand credit institutions’ cooperation with the State Revenue Service. Deeper cooperation programme would help identify suspicious financial transactions more efficiently.

Considering the changes to regulations that govern data protection, it is planned to authorize the Data State Inspectorate to request non-disclosed information from credit institutions.

Information in the hands of the credit institutions will have to be submitted to Anti-money Laundering Service’s coordination group and investigators responsible for the criminal process, as stated in the legislative draft.

Before amendments can be approved, they have to be approved by the Saeima in three readings.


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