The Council of Europe's anti-money laundering and counter-terrorist financing monitoring body, MONEYVAL, has published a report assessing the effectiveness of Latvia's measures against money laundering, countering terrorist financing and proliferation financing and their level of compliance with the Financial Action Task Force Recommendations, at the time of the on-site visit conducted in November 2024.
The assessment highlights Latvia's strong overall performance in preventing and combating money laundering, terrorist financing, and proliferation financing, while also identifying areas for further improvement, particularly in the supervision of certain non-financial sectors.
MONEYVAL notes that Latvia has undergone a substantial transformation of its financial system and risk landscape since 2018. Latvia demonstrates a well-developed understanding of money laundering and terrorist financing risks, supported by sustained political commitment and comprehensive national risk assessments.
According to the assessment, Latvia maintains a solid record of international cooperation, actively providing and seeking assistance through mutual legal assistance channels, joint investigation teams, and other international mechanisms. The Financial Intelligence Unit (FIU) is praised for its leadership within the global financial intelligence community and for producing high-quality analytical products that strengthen operational work.
Latvia's financial sector benefits from comprehensive risk-based supervision-most notably in the banking sector, where significant progress has been made since the previous evaluation. Latvijas Banka has enhanced its use of risk-assessment tools and inspection planning, contributing to proportionate and effective supervisory measures. By contrast, for the non-financial sector, MONEYVAL calls for improvements in the risk assessment methodology applied by the State Revenue Service to ensure better alignment with national and sectorial risks, and for the Latvian Council of Sworn Advocates to develop a fully risk-based supervisory approach.
Latvia has established a robust framework to ensure the transparency and accuracy of beneficial ownership information. Comprehensive verification measures and timely access for competent authorities support the effective functioning this system. MONEYVAL recognises the central role of Latvia's FIU within the country's AML/CFT system. The report highlights the FIU's strong access to information, substantial institutional reforms, and the high quality of its operational and strategic analytical outputs. Financial intelligence is routinely and effectively used by law enforcement authorities, and close cooperation between the FIU and investigative bodies contributes significantly to the effective identification of money laundering and related predicate offences.
Latvia's law enforcement authorities actively investigate money laundering and related predicate offences using a broad range of information sources and investigative techniques. While prosecutions of natural persons have resulted in effective, proportional and dissuasive sanctions, the absence of identifiable suspects in certain large-scale historical cases has limited prosecutorial outcomes. Legal persons are not yet pursued to an extent fully commensurate with Latvia's risk profile.
MONEYVAL further acknowledges Latvia's strong focus on asset recovery, underpinned by the extensive use of non-conviction-based confiscation. While the system is assessed as highly effective and Latvia's confiscation, freezing and seizing statistics demonstrate responsiveness to evolving risks, the lifecycle of criminal proceedings affects the timely delivery of final confiscation results and the repatriation of illicit assets.
With regard to terrorist financing (TF), the authorities have established mechanisms to detect and investigate potential activity and to apply disruption measures where prosecution is not feasible. Although one TF related investigation has been initiated so far, the overall country's risks and context suggest that this is consistent with its risk profile. Co-operation between competent authorities is effective and timely, and it is further strengthened through the work of a dedicated Countering Financing of Terrorism Task Force. Latvia has also put in place a framework for the timely implementation of targeted financial sanctions related to terrorist and proliferation financing. While financial institutions demonstrate an adequate understanding of their obligations, awareness among certain non-financial sectors, particularly in the legal profession, remains uneven.
Following the assessment, Latvia received a roadmap of Key Recommended Actions to be completed within three years. Based on the Effectiveness and Technical Compliance Ratings received, Latvia has been placed under regular follow-up and will report back to MONEYVAL in June 2028 as a part of the regular follow-up process.
The Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL) is a monitoring body of the Council of Europe entrusted with the task of assessing compliance with the principal international standards to counter money laundering, the financing of terrorism and the financing of proliferation of weapons of mass destruction, as well as the effectiveness of their implementation. MONEYVAL evaluates 33 States and territories and makes recommendations to national authorities in respect of necessary improvements to their anti-money laundering and counter terrorist financing systems and to counter proliferation financing.
