FACT SHEET: Why are banks asking questions?

Added: 28.07.2016
Why are banks asking questions? Similar to worldwide practices, the banks in Latvia have an obligation to apply the KYC principle in accordance with laws and regulations.

According to the Law On the Prevention of Money Laundering and Terrorism Financing, the bank is entitled to request its customers and the customers have an obligation to provide true information and documents necessary for the customer due diligence, including information on the beneficial owners, transactions executed by the customers, economic and personal activity, financial position, sources of money or other funds of the customers. In some cases, the bank may request additional information.

The aim of the KYC principle is to take care of safe environment, to prevent the risks of money laundering and terrorism financing. In order to assess and control such risks, the banks have to obtain information about their customers and the source of their funds.

FACT SHEET: Why are banks asking questions?

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