2024-10-02
Financial Integrity Newsletter – October edition
11.09.2023
To develop a better understanding of the risks associated with cash, the Financial Intelligence Units of Estonia, Latvia, and Lithuania conducted the first pan-Baltic strategic assessment of the movement of cash among the Baltic states. The assessment marks that cash movement trends imply that the Baltic states are generally used for transit. However, illicit cash that stays in the Baltic states risks being laundered and entering the shadow economy. The assessment provides several recommendations for decreasing the movement of illicit cash and bolstering the combating of cash-based money laundering.
Though the use of digital payments is on the rise, because of how difficult it is to trace, cash remains an important instrument for criminal activity and money laundering at an international level. The findings of the assessment “Licit and illicit cash flows in the Baltic states – a Strategic Assessment” suggest that cash-related risk exposure in the Baltic states has changed between 2019-2022.
The travel restrictions imposed in response to the Covid-19 pandemic and Russia’s recent invasion of Ukraine have significantly cut cash flows from Russia across the three countries. However, cash movement in the Baltic states remain high, with a lot of cash inflows from other countries. Though cash movement trends imply that the Baltic states are generally used for transit, illicit cash that stays in the Baltic states risks being laundered and entering the shadow economy.
The assessment concludes with several recommendations for bolstering the prevention of cash-based money laundering. Most importantly, more research needs to be done to develop an ongoing understanding of illicit cash trends, which requires closer collaboration and date exchange between Financial Intelligence Units, law enforcement, and other data holders. It is also important to continue harmonizing anti-money laundering rules among different countries, to prevent criminals from being able to exploit less strict cash rules in other countries in the European Union.
The collaborative strategic assessment was one of the latest activities of the AML Innovation Hub (AMLIH). AMLIH is a permanent Financial Intelligence Unit of Latvia initiative aimed at fostering the development of innovative solutions for more effective prevention, detection, and combating of money laundering. The project "Establishment of an AML Innovation Hub to improve the identification of the legalization of proceeds of crime" is implemented within the framework of the The Recovery and Resilience Facility of the European Union.
Licit and illicit cash flows in the Baltic states – a Strategic Assessment (ENG)
2024-10-02
Financial Integrity Newsletter – October edition
2024-09-19
Vehicles registered in the Republic of Belarus are officially prohibited from participating in road traffic in the Republic of Latvia