The 'Know Your Customer' (KYC) principle or why are banks asking questions?

Similar to elsewhere in the world, banks in Latvia have an obligation to apply the 'Know Your Customer' principle in accordance with the following regulations:

  • Law On the Prevention of Money Laundering and Terrorism Financing;
  • Regulations for Enhanced Customer Due Diligence issued by the Financial and Capital Market Commission (FCMC).

The aims of the 'Know Your Customer' principle is to maintain a secure environment, and to prevent the potential risks of money laundering and terrorism financing. To achieve this, all banks are obligated to obtain information on their customers and the origins of their funds.

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