An alarm has been sounded in the Saeima regarding the law on dirty money

The deputies of the Saeima have finally realized that they must personally and immediately get involved in monitoring and advancing the amendments to the money laundering law because leaving this process to its own devices, a law will be adopted that will harm every citizen and the Latvian economy as a whole. The absurd demands to restrict people's fundamental right to property and entrepreneurship must be erased from the orders of foreign consultants that have been rewritten by officials.

Yesterday, the draft law “Amendments to the Law on the Prevention of Money Laundering and Terrorism and Proliferation Financing” was discussed at the meeting of the Financial Sector Supervision Subcommittee of the Budget and Finance (Taxation) Committee of the Saeima. This is on the initiative of the Members themselves, as a different committee has been appointed as the one responsible, the Saeima Defense, Internal Affairs and Corruption Prevention Committee, which does not normally deal with economic, financial and business matters. And it was not a coincidence, but a deliberate trick - to pass the bill to those deputies who do not understand anything about finances. If they do not understand, then no questions will be asked and the bill will be pushed as a matter of urgency, protecting it from proposals. However, the Ministry of Finance's plan has not worked.

Business liquidation mechanism

Partly due to the alarm caused by Neatkarīgā, the deputies of the Committees on Economic Affairs and Budget realized that they, who understand something about finance, unlike their colleagues in the Defense Committee, are trying to get bypassed. But that won't happen. Amendments are being prepared for the second reading of the draft law and there will be many of them. This is promised by the Chairman of the Financial Sector Supervision Subcommittee Gatis Eglītis. Of course, the central issue at the hearing was related to Section 10 of the draft law, which requires the impeccable reputation of every true beneficiary and plans to remove shares if it is lacking. It would be a completely new and disproportionately harsh sanction mechanism, formally - for freeing the business environment from criminal elements, but in practice, it could develop into a mechanism for freeing Latvia from the business environment as such.

MP Aleksandrs Kiršteins spoke quite harshly about it because in such an implementation the law will automatically exclude export opportunities to the former CIS countries: “Is there at least one person in Kazakhstan and Uzbekistan who is honest by European Union standards? Sometimes it seems to me that some idiots make these laws! There is a clan community in these countries. Ukraine, Uzbekistan, Russia. And you're telling me that you can control something like that!

What does Latvia care, what reputation does someone have in Kazakhstan?” In addition, banking scandals show that reputation problems can be found in almost all European countries, in which case the only country with which Latvian entrepreneurs will be allowed to work will be the Vatican. Well, maybe also Finland and Norway, who have missed out on any banking scandals. Absurd! Deputy Kiršteins calls for the urgency of the bill to be lifted and for the Economic Committee to be appointed as co-responsible.

The government did not demand urgency

By the way, the Cabinet of Ministers did not at all demand the urgency of the bill, the Ministry of Finance did. But as for the reasons why, the Deputy State Secretary of the Ministry Līga Kļaviņa this time presented something completely different than at the first meeting of the Defense Committee. It takes time to develop digital solutions for the customer research tool and reporting system. Hence the urgency. But she said earlier that the bill should be approved by March 1, when it is planned to report to the auditors of international lenders FATF and Moneyval. Urgency of the law is therefore for a checkmark, but the possible consequences due to a poor quality law are dangerous for the entire Latvian economy. There will simply be no people doing business. MP Vjačeslavs Dombrovskis commented on this aspect in more detail: “You believe that the economy has unlimited human resources - those with an impeccable reputation who will arrive to become the real beneficiaries. But what is an impeccable reputation? Today, it is enough to appear in the news or even just on social networks, there is no need for a court ruling to make a reputation no longer perfect.

You restrict people from doing business, but very few people qualify for your understanding of who is the perfect taxpayer and what is the perfect entrepreneur.”

About Znotiņa - only positive comments allowed

Even those who ask for impeccable reputation are currently unable to explain how deprivation of property will work in practice - in which cases reputation will matter and in which it will not. The head of the subcommittee Gatis Eglītis asked the promoters of the draft law to explain one specific example. The Corruption Prevention and Combating Bureau has punished the country's main financial intelligence Ilze Znotiņa for combining prohibited positions. She first publicly denied this violation of the restrictions of a public official, then admitted and paid the fine. If, after working in the public service, she wished to move to the private sector and become a shareholder, would she be subject to the requirement of impeccable reputation? Could Znotiņa be the real beneficiary? Kristaps Markovskis, a representative of the Financial and Capital Market Commission, refused to answer, not wanting to comment on Znotiņa. But, in principle, the infringement must be assessed in relation to the conduct in question. The Financial Intelligence Unit took the opportunity to remain silent.

Who will issue the indulgence?

The Ministry of Finance explains that the concept of reputation is included in the draft law for the sole purpose of preventing criminals from doing business. "If there is a concern that the regulation is misunderstood and the reputation is understood to be more, then this was not our offer," explains the representative of the ministry Līga Kļaviņa. However, in the proposed wording and in its vague texts scattered with political slogans, one can understand and find everything one wants. Therefore, the deputy Gatis Eglītis concludes that "to add reputation to the law - this is a rather dangerous direction". And the question is who will be the judge - the assessor of the nation's reputation. Member Ralfs Nemiro draws an analogy from the Christian life: “If someone has sinned, he goes to church and is cleansed. If someone has not had such a good reputation at some point, will there be an opportunity to improve their reputation? And who will be the institution that will assess whether the reputation has improved?” Probably Ilze Znotiņa would like to dig into the reputation of every inhabitant of Latvia (except herself). However, the draft law does not provide answers to these and other crucial questions. Those deputies of the Saeima, who understand something from finances and the national economy, will now have to audit in breakneck speeds the half-baked work sent to the Saeima in order to prevent the threat to business and the fundamental rights of the population included in the draft law.

The Constitution guarantees the people of Latvia the right to property and the right to freely choose an occupation.