On Wednesday, 16 October, the OECD Working Group on Bribery (OECD WGB) has published the assessment of Phase 3 for Latvia, indicating that the results of combating of bribery are still not proportional with the cross-border bribery and money laundering risks it is subject to. OECD indicates that it is necessary to transform positive changes in legislation into further practical application thereof. At the same time it should be mentioned that accomplishments of Latvia so far has convinced WGB that enhanced supervision mechanism should not be determined for Latvia and the next report on the performance of recommendations in determined in the autumn of 2021 according to general procedure.
OECD indicates that since 2014, when Latvian joint the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, there is no cross-border bribery case forwarded for trial to the court and examination at the same time takes place in three such cases. No financial institution is so far called to justice regarding its role in the cross-border bribery schemes or money laundering.
At the same time it is indicated in the report that reforms of recent years in the areas of finance and justice in Latvia indicate on significant positive changes in this area, which have minimised risks for the possibilities of cross-border bribery and money laundering in Latvia, as well as sufficiently effective reforms are commenced and already partially implemented, in order to stipulate such changes in laws as well as in practice. Besides, WGB indicates that these reforms are in the initial stage thereof and minimisation of the national risks and combating of established violations and crimes should be continued.
The report provides detailed assessment, establishing that the commenced reforms are correct, they should be continued and strengthened. 44 recommendations are given at the end, driven towards the fact in order Latvia would completely ensure fulfilment of the requirements of the Convention. Key recommendations are made in the following areas:
- To plan sufficient resources and knowledge to those authorities, which reveal, examine and try the foreign bribery and related money laundering;
- To enhance introduction of the principle of imminent punishment over those legal and natural persons, in particular in the financial field, which are involved in the foreign bribery and related schemes;
- To strengthen cooperation between KNAB (the Corruption Prevention and Combating Bureau of Latvia), State Police and Prosecutor’s Office, in order to ensure strategic access to investigation of complicated economic crimes;
- To ensure effective supervision and control of the financial sector.
The above-mentioned assessment is already the third in a row with regard to performance of Latvia on implementation of the requirements of the Convention. The Convention determines an obligation for Latvia to criminalize bribery of foreign officials, to effectively reveal and investigate it, call persons, both, natural and legal, to criminal liability and to impose effective and deterrent punishments. In addition, Latvia has an obligation to ensure that also crimes related to such bribery, namely, laundering of proceeds of crime and accounting violations, are effectively resolved, investigated and persons are called to justice. That includes also effective supervisory and prevention measures in order to not permit bribery and related crimes and violations in the financial system and entrepreneurship.
Since Latvia joined the Convention, the Ministry of Justice coordinates the work of all authorities with regard to fulfilment of the requirements of the Convention. Performance of set tasks should be provided by the Ministries of Justice, Finance and Foreign Affairs, KNAB, State Police, Prosecutor’s Office and courts, FCMC, FIU, SRS, SAO and Altum. In relation to the draft report, Latvia has to provide a report on the fulfilment of recommendations in October 2021.
You may become acquainted with the whole content of the 3rd Phase Report here.