Bank Secrecy in Latvia
The banking sector is one of the main industries in Latvia, since its independence in 1991.
There are strong secrecy laws, and the Latvian courts efficiently enforce them.
The main law is the Law on Credit Institutions, passed in 1995.
Section 61 of the Law states that “it is the duty of a credit institution to guarantee the confidentiality of the identity, accounts, deposits and transactions of clients.”
The law also provides for criminal liability for breach of bank secrecy: “Criminal proceedings in due course of law shall be instigated against any person who has deliberately or inadvertently disclosed, to the public or to unauthorized persons, information on the accounts of and financial services rendered to customers which has been entrusted or has become known to such a person”.
Non disclosable information are always:
- account numbers and names;
- details of transactions;
- personal data of the customer and of the customer’s beneficiary;
- information and documents concerning any aspect of the customer’s business or personal activity
Information can only be disclosed by written order of the Latvian authority, following a court’s ruling. Such information can only be provided to:
- the Office of the Republic Prosecutor;
- a court of the Republic of Latvia;
- the Latvian Financial Intelligence Unit;
- the Latvian State Revenue Service;
- only in case of Latvian residents, to other state institutions
No “fishing expeditions” from foreign investigators have ever had any success in Latvia. Additionally, the law doesn’t give any opportunity to law enforcement authorities to put a bank under pressure in order to circumvent bank secrecy.
Foreign authorities have no powers over Latvian banks, and a court will order disclosure of information only in case there is evidence that a crime has been committed in Latvia.
Lastly, the Data Protection Law ensures that information can only be retained for a certain period of time, usually 5 years, after which it is destroyed.
All this shows how banks in Latvia can be considered very safe, more than banks in classic offshore jurisdictions which are now put under much pressure.