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DE RUEHRA #0422/01 1521310
ZNY CCCCC ZZH
P 011310Z JUN 07
FM AMEMBASSY RIGA
TO RUEHC/SECSTATE WASHDC PRIORITY 4081
INFO RUEHTL/AMEMBASSY TALLINN PRIORITY 4077
RUEHVL/AMEMBASSY VILNIUS PRIORITY 3869
RUEHBS/USEU BRUSSELS PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY

C O N F I D E N T I A L RIGA 000422 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 05/18/2017 
TAGS: SNAR EFIN PGOV PTER KCRM LG
SUBJECT: LATVIA'S FIU REPORTS HISTORIC SUCCESS FOR 2006 
 
REF: A. 06RIGA 552 
 
     ¶B. RIGA 200 
 
Classified By: A/DCM Tamir Waser for reasons 1.4 b and d 
 
¶1. (U) Summary:  Over the past nine years, the Latvian 
Financial Intelligence Unit (FIU) has grown both in size and 
experience and is considered on of the most sophisticated in 
the region.    The number of suspicious activity reports 
turned over to the FIU from looking forward has nearly 
doubled since 2004 as has the number of cases passed to the 
Prosecutor General's office. The FIU is working with the 
Parliament to further strengthen their money laundering laws 
and remains committed to combating terrorist financing. 
Embassy Riga has a positive working relatinoship with the 
FIU.  End Summary. 
 
 
¶2. (U) PolOff met with Viesturs Burkans, Head of Latvia's 
FIU, in mid-May to discuss progress on money laundering 
issues.  Burkans reports that 2006 was their most successful 
year since they were first formed in 1998.  The number of 
suspicious activity reports given to the FIU from local banks 
has nearly doubled since 2004.  The number of transactions 
banks have refused to process and have reported to the FIU 
has doubled since 2005.  Of those reported to the FIU in 
2006, over half were forwarded to the prosecutor's office for 
possible prosecution.  In 2006, the FIU froze over 6.3 
million USD worth of assets.  As of May of 2007, the FIU has 
already frozen over 2 million USD this year. 
 
Structure of the FIU 
 
¶3. (U) Established in 1998, the FIU employs 20 people 
specialized in handling unusual and suspicious transactions, 
international cooperation, and terrorist financing issues. 
Most FIU employees have a background working in the police, 
the prosecutor's office or various credit and financial 
institutions.  The FIU reports to the Prosecutor General and 
is governed by an advisory board, which the Prosecutor 
General also chairs.   The Advisory Board coordinates 
cooperation between the FIU and other law enforcement 
institutions. 
 
Priorities: 
 
¶4. (U) The FIU has two priorities.  First, the FIU focuses on 
freezing large volumes of money derived from criminal 
activities.  The second priority focuses on those cases with 
large numbers of individuals or entities (over twenty) or 
large amounts of money (over 50,000 USD) involved in alleged 
money laundering schemes. 
 
 
Power to Fight Terror Financing 
 
¶5. (U) After September 11th, several amendments were made to 
the financial crime law to address the issue of terrorism and 
the financing of terror.  According to these amendments, 
financial resources and other property are considered 
criminal proceeds  whether controlled directly or indirectly 
by an individual who is included on a terrorist watch list 
complied by a state or international organization as 
specified by the Cabinet of Ministers.  Additionally, 
included are individuals who the Latvian authorities, either 
through investigation, pre-trial discovery or other means, 
place under suspicion of committing a crime of or is a 
participant to terrorism. 
 
¶6. (U) To their list of indicators of unusual transactions 
and reporting procedures, the Latvian government has added an 
additional indicator which reads: a transaction shall be 
considered as an unusual transaction if it involves a 
customer who is suspected of being involved in acts of 
terrorism or complicity therein and has been included in the 
list of persons about which credit and financial institutions 
have been informed by the FIU. 
 
¶7. (U) Under the law, Latvia recognizes the lists of other 
countries who are members of the United Nations, the European 
Union, the European Council, the Organization for Security 
and Cooperation in Europe, Interpol, Europol, the 
International Convention on the Suppression of Terrorist 
Financing or the Edgmont Group. 
 
¶8. (U) Should the FIU identify a case of potential terrorist 
financing, or receive a report of such from another financial 
institution, the FIU immediately begins its verification 
process and issues an order to freeze the funds or property. 
The case is then sent to the Prosecutor's office which 
decides if a criminal case will be opened.  The country or 
international organization that has this individual or 
company on their terrorist list is informed about the action 
taken by the FIU.  Of the FIU's twenty employees, two 
specialize in terrorist financing. 
 
New Money Laundering Laws 
 
¶9. (C) According to Burkans, the prosecutor's office will be 
putting forward for consideration by the Parliament a new 
draft law on money laundering.  This new legislation will 
bring them into compliance with outstanding EU requirements 
and strengthen the overall legal framework for the FIU's 
work.  However, this new law will not change how the FIU does 
its work.  Under the new law, the FIU would have the 
authority to freeze assets based on the request of another 
FIU.  However, Burkans anticipates the possibility of 
resistance within the Parliament to this clause because the 
law does not require reciprocity on the part of the 
requesting institution. 
 
Public Interest and Support 
 
¶10. (C) When asked about the public support for his work, 
Burkans responded that it has been surprising how supportive 
the general public is on reporting fraud, abuse, and money 
laundering.  Burkans explained a recent phenomenon in his 
office is that he has begun to receive letters from ordinary 
citizens writing to him explaining a wrong doing that they 
have noticed and providing him with copies of documents. 
With one exception, all the information that he has received 
form ordinary people through these letters has proven to be 
legitimate and has been forwarded to the Prosecutor's office. 
 Interestingly, these cases that were sent to him via mail 
from regular citizens were cases that had not been reported 
by any of the banks involved.  One particular group of people 
he hears from the most often are those individuals and 
auditors who have been appointed by the court to oversee 
bankruptcy cases.  As they begin adjudicating the case, they 
recognize money laundering and forward the information to the 
FIU.  Burkans states that the public is involved and it is a 
good thing. 
 
¶11. (C) Another recent development in the public area is the 
interest of the press.  Recently, Burkans was approached by a 
group of journalists who have formed a committee to aid in 
the fight against money laundering.  They have committed to 
turning over any documents they come across which may be of 
interest to the FIU.  These are all open source documents 
which journalists regularly use such as those from the 
Enterprise Registry but, due to shear volume, may not be 
normally considered by the law enforcement community.  This 
group also hopes to shine more light on the issue by 
providing greater amounts of coverage. 
 
FIU's future 
 
¶12. (U) Latvia's law on cross border cash declaration (reftel 
B) entered into force July of 2006.  As such, the 
responsibilities of the FIU have been extended to include the 
monitoring of reports sent to the FIU concerning cross-border 
cash declaration.  As reflected in their statistics, 
suspicious activity reporting from institutions who have been 
less active in the past, continue to increase, thus the 
overall work load of the FIU has dramatically increased.  In 
response, the FIU will be increasing its staff by ten 
positions. (four data input operators and six financial 
analysts) and continues to lobby the cabinet for new 
facilities 
 
¶13. (C) Comment:  Burkans remains positive about the work of 
his unit and seems to be untouched by any outside political 
pressures.  His staff is very young, idealistic and energetic 
and takes their work seriously.  Burkans expressed 
apprehension to moving to new facilities because currently, 
they are in the same building as the prosecutor and this has 
helped to facilitate their cooperation, but he recognizes the 
need for bigger accommodations for the sake of his staff. 
Burkans also reports that the Latvian FIU's relationship with 
US Treasury and FINCEN is excellent and praises the 
cooperation.  However, his praise is less enthusiastic for 
the FIUs of western EU countries, stating that they can often 
be very challenging to work with.  The best working 
relationships remains between Latvia and its Baltic 
neighbors.  End Comment. 
 
BAILEY