Embassy of the United States

Riga, July 12, 2006. -- On April 21, 2005, the United States Department of the Treasury designated two Latvian banks – VEF Bank and Multibanka – as financial institutions of “primary money laundering concern” pursuant to Section 311 of the USA PATRIOT Act. Today, after thorough investigation, Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a final rule on VEF Bank that prohibits U.S. financial institutions from establishing, maintaining, administering, or managing any correspondent account in the United States for or on its behalf. Simultaneously, FinCEN rescinded its designation of Multibanka, allowing U.S. financial institutions to continue financial relations with that bank.

The decision to finalize the rule on VEF Banka was taken to safeguard the U.S. financial system from abuse. Both decisions were based on a lengthy review of the facts presented on the record. Moving forward, the U.S. Government will continue to work with the Latvian Government to strengthen its capacity to combat money laundering by providing training and technical assistance and by comparing best practices. The U.S. Government will also continue to share information with Latvian law enforcement and prosecutorial authorities regarding financial crime.

In the context of these decisions, the United States Government has noted significant progress by Latvia in its efforts to combat financial crime and money laundering. Likewise, in March the U.S. Department of State reported on these positive steps in its annual International Narcotics Control Strategy Report, which can be accessed on the Internet at http://www.state.gov/p/inl/rls/nrcrpt/2006/vol2/html/62144.htm. To ensure proper protection of Latvia’s financial sector, authorities will need to continue their efforts to effectively implement and enforce their strengthened anti-money laundering regime.

The U.S. Government appreciates Latvian efforts to combat money laundering and create institutions and procedures to address financial crime. U.S. Ambassador to Latvia Catherine Todd Bailey noted, “We are pleased to come to closure on this particular issue involving these two Latvian banks. More broadly, I want to use this occasion to highlight and to congratulate the Prime Minister and the Government of Latvia on the very significant progress made in combating financial crime over the last year, thanks to the serious efforts of the Latvian authorities and the Latvian financial sector. We must continue to work together to remain vigilant against abuse of the Latvian and U.S. financial systems. We look forward to additional exchanges of information and training opportunities between our two governments. I am pleased that U.S. authorities can now point to Latvia as a model for other countries to follow in their efforts to fight international money laundering. This is a real credit to Latvia and reflects a continued desire on the part of the U.S. Government to help ensure Latvia’s success in continuing to develop as a progressive financial center for businesses in Northern and Eastern Europe.”

For additional information we refer you to the Department of the Treasury at http://www.fincen.gov/po_newsreleases.html.

U.S. Embassy, Riga, Public Affairs Section
Smilsu iela 7
Riga, LV 1050
Phone: 371 750-9022
Internet: www.usembassy.lv
Media specialist's e-mail: ruklisk@state.gov