Latvijas Banka Updates AML/CFT and Sanctions Risk Management Guidelines

Latvijas Banka has updated its guidelines on the establishment of internal control systems for anti-money laundering, counter-terrorist and proliferation financing (AML/CFT), and sanctions risk management, as well as customer due diligence (CDD).

The guidelines serve as a practical handbook for financial market participants, helping to create a consistent understanding of how regulatory requirements should be applied. Their objective is to strengthen the prevention of financial crime and support the implementation of a risk-based approach across the financial sector.

They provide detailed explanations and practical examples for credit institutions and other financial institutions to help improve their internal control systems and conduct customer due diligence proportionate to risk.

The guidelines were updated in March 2026 to ensure alignment with amendments to the Latvian AML law and with the guidelines of the European Banking Authority. The update also incorporates supervisory observations and feedback from market participants.

Key updates include:

• Additional guidance in Section 4.4 “Governance”, clarifying the role and responsibilities of the AML/CFT responsible officer
• A new Chapter 14 dedicated to crypto-asset service providers
• A new Section 5.10 on non-face-to-face identification
• A new Section 5.14.6.3 addressing due diligence and monitoring of apartment owners’ associations
• A new Section 5.17 on due diligence for transactions related to increases in an institution’s share capital
• Updates to Chapter 8 on sanctions risk management, including guidance on the role of the sanctions risk officer, monitoring system requirements, and customer grouping
• Clarifications on senior management approval requirements for relationships with customers from high-risk third countries
• Updates regarding data retention when customer due diligence is discontinued
• Amendments related to enhanced due diligence for politically exposed persons (PEPs)