The Law on the Prevention of Money Laundering and Terrorism Financing stipulates that, when establishing business relationships, banks and other entities subject to the law must, if necessary, determine the origin of the client’s funds and the origin of their material wealth. These questions are particularly relevant if the origin of the funds is linked to transactions involving crypto assets, high-risk areas, or high-risk jurisdictions.
It is no secret that in recent years the financial sector has adopted a de-risking strategy, which involves avoiding risks rather than managing them. Many clients in Latvia's financial sector have encountered situations where an institution restricts, terminates, or does not initiate cooperation with a client if it identifies certain risk-enhancing circumstances.
BDO's team of certified specialists in the prevention of money laundering and international sanctions has experience supporting clients in financial institutions both in Latvia and other EU member states. This includes assisting in explaining the origin of clients' funds and wealth. Notably, we have successfully analyzed various blockchain transactions and prepared reports on the origin of clients' wealth for crypto asset exchange platforms.