Citadele Bank (Latvia)

Citadele Bank signs the administrative agreement with the FCMC

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JSC “Citadele banka” (the Bank) and the Financial and capital markets commission (the FCMC) has signed the administrative agreement regarding an inspection of the Bank carried out by the FCMC during 2018.  

Both the Bank and the FCMC agrees on the required actions to be taken by the Bank for further improvements in the anti-money laundering and terrorism financing prevention (AML/CFT) area, including an additional EUR 2.3 million investment to improve the Bank’s internal control systems.     

The review conducted in 2018 covered Citadele’s compliance with applicable AML/ CFT legislation. The agreement refers to a small number of alleged shortcomings on certain limited occasions whereby the client’s beneficial owner was not sufficiently proved or documented. Also, on certain limited occasions, it was not fully ensured that the documentation proving the client’s economic activity have been acquired in sufficient scope and quality. However, all customers with the identified shortcomings were already closed or in the closing process as per decisions taken by the Bank prior and independently of the FCMC audit.

“From 10 years ago, Citadele has since transformed into a bank for Latvian and Baltic residents – individuals and businesses. We are recognized as the leading local bank with digital capabilities and the best customer service,” says Uldis Upenieks, Member of the Management Board, Chief Compliance Officer. “Citadele has always committed to achieving and maintaining the highest anti-money laundering and combating the financing of terrorism (AML/CFT) compliance standards, by investing in IT systems, internal control, training of staff, independent testing etc. In two sector-wide exercises mandated by the FCMC and conducted by Navigant, Citadele was ranked best-in-class in the sector for AML/KYC compliance, and expects to maintain this leadership with further investments,” adds Upenieks.

The Bank will pay a remediation fee of EUR 647 070. Setting the amount of remediation fee, the FCMC has taken into consideration that the AML/CFT risk level that characterizes the Bank’s clients base and financial services is very low.

The Bank has independently and on its own initiative developed the “Remediation plan for the improvement of the Internal Control System in AML/CFT” (“Remediation plan”) to deliver on improvements identified by the FCMC. There have already been several steps taken in terms of implementation, for example the setup of the “KYC Competence Centre”, further enhancement of documentation and IT systems, and hiring of additional AML compliance staff. 

As part of the “Remediation plan”, Citadele has committed to invest an additional EUR 2.3 million and to take actions to further strengthen the Bank’s processes, systems and routines.