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FCMC Fines AS PrivatBank Worth €768K for AML Non-Compliance

R Richard M. NOVEMBER 24, 2021 1 minute read

The FCMC fined PrivatBank for AML/CTPF compliance breaches and instructed the bank to address its regulative shortcomings.

On 23rd Nov 2021, the Financial and Capital Market Commission (FCMC) released a statement for the AS PrivatBank to strengthen its internal governance and control system while improving its risk management for effective AML compliance.

Following the inspections carried out in 2020, the FCMC imposed several obligations to the PrivatBank and a EUR 768,653 fine. The bank breached Anti-Money Laundering, Combatting Terrorism, and Proliferation Financing (AML/CTPF) regulation and failed to address “identified infringements and shortcomings.”

The FCMC warned the former acting Chairperson of the Board of AS PrivatBank, Inga Rumba when it “identified the liability of the responsible officials” for the weaknesses in compliance.

The FCMC assessed investigations concluded that the PrivatBank has not established any internal control system for AML/CTPF and “that the bank needs to ensure independent and appropriate customer due diligence, supervision and operation of internal control system that corresponds to the bank’s business model, customer specificities and the level of risk”.

The several obligations imposed by the FCMC to the PrivatBank are:

To draw up an action plan and “address the shortcomings identified during the inspection”
To implement the procedure for “the transformation of risk management culture” under the management of an independent professional consultant
To involve an independent or a commercial sworn auditor to assess the “effectiveness and compliance of the internal control system of the bank with the regulatory requirements in the field of AML/CTPF”
To develop measures that effectively implement the recommendations suggested

The FCMC finally stated that it will “closely follow the legal implementations within a time limit to avoid the misuse of the bank and the Latvian financial system for ML/TPF purposes.”

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