After the liquidation of ABLV Bank and the bankruptcy of PNB Bank, and beginning of so-called “overhaul” of its financial sector, a range of measures were taken in arrange to essentially reinforce the battle against the legalization of proceeds from crimes.
Hence, issues related to seizure of assets in bank accounts and the need to prove the lawfulness of origin of such assets has lately become a very significant issue in Latvia.
For the first quarter of 2020 alone, the Financial Intelligence Service (FIS) of Latvia has blocked monetary assets totalling more than 159 million Euros, which is 4 times the sum of blocked assets for the same period in 2019. A noteworthy portion of these is made up of the assets of clients of ABLV Bank and PNB Bank where questions raised around the legality of their income.
A court order isn’t required to freeze assets. At further stage it’ll be essential to keep the assets frozen, but at the beginning no legal substantiation is required. If banks and other payment institutions have doubts of the legitimacy of the assets of the relevant person or entity, such assets stores can be frozen by the order of FIS for a period of 45 days.
In order to release the assets it is essential to prove that these have lawful background and correspond to the official income of their owner. Every situation is different and there isn’t any unified to-do list, however, it is worth noting that combating the unlawful freezing of assets might be quite a burdensome task that requires qualified legal assistance.
NJORD is one of Latvia Law Firms represents the interests of banks’ clients in relations with liquidators, with other representatives of banks, in the police, prosecutor’s office, court and other law enforcement bodies.
If you have any questions or need additional consultation in connection with the above information, please contact the partners of the NJORD Law Firm Riga office – Attorney-at-law Dmitri Kolesnikov (t. +371 67 313 315, dk@njordlaw.lv) and Attorney-at-law Dmitri Nikolaenko (t. +371 67 313 315, dn@njordlaw.lv)
