Why do banks ask

We strive to be a reliable and responsible partner and try to give our clients the best service and offer them quality financial advice. Our goal is to ensure compliance with legal requirements in daily operations as well as one of the main banking principles - know your client.

Nowadays the financial operations are primarily carried out by credit and financial institutions. As high security requirements apply to these institutions, the client data processing is subject to strict rules and regulations. They stipulate that a bank must be in possession of the summary of the data of a client and the related persons, as well as of the clients' economic activity.

The bank is obliged to collect and periodically update data on the client by the Law on the Prevention of Money Laundering and Terrorism Financing of the Republic of Latvia and subordinate legislation. In order to meet the legal requirements, as well as to facilitate the process of submission of the information for the Client, the bank has prepared a standardized form for the clients of Danske eBank to complete. From now on, visiting a bank's branch is no longer required in order to provide (update or replace) the data.

 

 

Why the bank is inquiring

  • What is money laundering?

    The bank is inquiring its clients for the purpose to contribute, by the means available to it, to the common interest - public security.

    According to the Law on the Prevention of Money Laundering and Terrorism Financing, the following shall be considered to be money laundering:

    1. the conversion of proceeds of crime into other valuables, transfer of their location or ownership while being aware that these funds are proceeds of crime, and if such actions are carried out for the purpose of concealing or disguising the illicit origin of funds or assisting another person who is involved in committing of a criminal offence, in the evasion of legal liability;
    2. the concealment or disguise of the true nature, origin, location, disposition, movement, ownership of the proceeds of crime, while being aware that these funds are the proceeds of crime;
    3. the acquisition, possession, use or disposal of the proceeds of crime of another person while being aware that these funds are the proceeds of crime;
    4. The actions referred to in paragraphs 1., 2., and 3. of this section, when a person deliberately assumed the funds to be criminally acquired, shall also be regarded as money laundering.
  • Data provision and updating
    Timely updating of the data is necessary to ensure that neither the bank nor the clients of the bank would become involved in illegal activities (money laundering, tax evasion, fraud, corruption, terrorist financing, etc.).

    Please be advised that in case of the client's failure to present the required data in due time, the bank may take steps to restrict the client's use of the accounts or terminate the business relationship.
  • Refusing to present the data or provision of false information

    According to the Law on the Prevention of Money Laundering and Terrorism Financing, if the client avoids or refuses to provide the information about the origins of the cash or of the property and other additional data, at the bank's request, Danske Bank A/S Latvia branch is entitled to limit or terminate the transactions or business relationships with the client.

     

     

  • Beneficiary

    According to the Law on the Prevention of Money Laundering and Terrorism Financing, the beneficiary shall be:

    • Regarding corporations - natural person who owns or directly or indirectly controls more than 25 per cent of corporation's equity or the total amount of voting shares, or who controls the activity of a corporation in any other way;
    • Regarding other legal arrangements - natural person who owns or on whose behalf the arrangement has been established or operating, or who directly or indirectly exercise control over the arrangement (including founders, managers, trustees etc).
  • Politically exposed persons

    According to the Law on the Prevention of Money Laundering and Terrorism Financing a person who holds or has held a prominent public position in the Republic of Latvia, a country of the European Union or European Economic Area or a third country, including:

    • senior-level state official,
    • head of a state administrative unit (municipality),
    • head of the government,
    • minister (deputy minister or assistant deputy minister if there is such position in a relevant country),
    • secretary of state or another high level official in the government or state administrative unit (municipality),
    • member of parliament or similar legislative body,
    • member of the management body (board) of a political party,
    • judge of constitutional court, supreme court, or another level court (member of judicial body),
    • member of the council or board of a supreme audit institution,
    • member of the council or the board of a central bank,
    • ambassador, charge d'affaires,
    • armed forces higher officer,
    • member of the council or board of a state capital company,
    • head (director, deputy director) of international organization and member of the board or a person who holds an equal position at such organisation.

    shall be deemed a politically exposed person (PEP).

    The following person shall be deemed a family member of a politically exposed person:

    • a spouse or person considered to be the equivalent to a spouse. A person may be deemed the equivalent to a spouse only provided that he / she has such status under the laws of the respective country,
    • a child or a child of a politically exposed person’s spouse or person considered to be the equivalent to a spouse, his / her spouse or person considered to be the equivalent to a spouse,
    • a parent, grandparent or grandchild,
    • a brother or sister.

    A close associate of a politically exposed person is an individual publicly known to maintain business or other close relationship with a politically exposed person, or to be a shareholder in one and the same commercial company with a PEP, and also an individual who is the sole owner of such legal entity which is known to be actually established for the benefit of a PEP.

  • International sanctions
    The banking services and financial operations must be in conformity with the requirements of the legal acts of the Republic of Latvia and the European Union and consistent with the sanctions of the European Union, United Nations and United States as well as the international sanctions. The bank is not carrying out itself and is not servicing the transactions and operations of its clients, if any one party to the transaction is subject to international sanctions.
  • Tax payment liability in a foreign country and territorial sanctions

    According to the Foreign Account Tax Compliance Act (FATCA), it is required to ensure that the US taxpayers would comply with the requirements of the US tax law and prevent their abuse of foreign banking services in order to avoid the relevant financial obligations. With regards to this agreement, the banks operating in Latvia must identify the accounts belonging to the US taxpayers. The information about these accounts and their holders must be submitted to the State Tax Inspectorate, which shall pass the received data about the US taxpayers to the US tax authorities.

    What data are collected and transmitted?

    • Full name (company's name)
    • Address;
    • US federal taxpayer identification number (abbreviated - TINs)
    • Latvian taxpayer identification number
    • Account number
    • Account balance or value
    • Total amount of interest, dividends and other revenue
    • Total gross income from the sale or redemption of the assets
    • Name and identification number of the reporting US financial institution

    Common reporting standard (CRS)

    The Organization for Economic Co-operation and Development (OECD) establishes standards relating to the payment of taxes (more information).

    Danske Bank is guided by the order, which provides that the financial institutions are required to present to the State Tax Inspectorate under the  State Revenue service of Latvia the data and information about the resident of the European Union member states or other jurisdictions and the information about their accounts.

    According to the Common Reporting Standard (CRS), which entered into force on 1 January 2016, the financial institutions are required to identify financial accounts belonging to the clients who are residents for the tax purposes of the country or jurisdiction that is not the financial institution's state or jurisdiction.

    According to this law the bank is required:

     

    • Identify the residency of new private and corporate clients for the tax purposes (including the clients who have a residence for tax purposes only within the country)
    • Check the existing private and corporate clients whose residence for tax purposes is in a country which is different from the country of the bank's activities (deadline - 31 December 2018)
    • Identify the clients legal persons and their beneficiaries/controlling persons whose residence for tax purposes is in a country which is different from the country of the bank activities
    • Notify the local tax authorities about the clients whose residence(s) for tax purposes is/are in a country which is different from the country of the bank activities

    Therefore, we ask the clients to specify the countries in which you pay the taxes, as well as your taxpayer identification number.

    The forms approved by FATCA/CRS:

    FATCA/CRS Self-Certification Form for Entities
    FATCA/CRS Self-Certification Form for Individuals

    What data is collected and transmitted?

    • Full name (company's name)
    • Address
    • Jurisdiction(s) of residence, where the person has a duty to pay taxes
    • Taxpayer identification number(s) (acronym - TINs); See here for more information on TIN formats applicable in the relevant jurisdictions
    • Date of birth
    • Place of birth

    For more information about the regulations for residence for tax purposes in a particular jurisdiction can be found on the OECD website.

  • Useful links and other important information

    In order to ensure smooth cooperation, please fill out the forms presented by the bank. All the information provided for you is treated as confidential and processed in accordance with the bank's regulations for secrecy of information and may be made public only where required by legislation.

    Danske Bank has the right to refuse provision of certain services, as well as to limit their provision or to terminate the contract if the client does not submit the required information.

    Danske Bank's activities are under constant supervision and evaluation of external auditors and the Lithuanian Bank as well as the auditors of Danske Bank Group and branch.

    More information about the bank's obligations can be found:

     If you have any questions, please call +371 67 959 599 - weekdays 9 a.m. to 5 p.m. or send an e-mail to info@danskebank.lv.