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20 December 2016 Regulations No.214

Riga (Financial and Capital Market Commission, minutes of the Council’s

meeting No. 44, par. 5)

Regulations regarding Provision of Staff Resourcesand Staff Training for Money Laundering and Terrorist Financing Risk Management

Issued pursuant to Clause 3, Paragraph two, Section 47 of the

Law on the Prevention of Money Laundering and Terrorism Financing

1. General Provisions

  1. The Regulations regarding Provision of Staff Resources and Staff Training for Money Laundering and Terrorist Financing Risk Management (hereinafter referred to as the “Regulations”) shall impose the requirements for the provision of staff resources and staff (hereinafter referred to as the “staff”) training for money laundering and terrorist financing (hereinafter referred to as the “ML/TF”) risk management on credit institutions and branches of credit institutions of Member States and third countries (hereinafter referred to as the “credit institution”).
  1. The purpose of the Regulations is to ensure that the credit institution conducts the measures necessary for the provision of staff resources and staff qualifications, as well as training and replacement thereof according to the ML/TF risk inherent in the commercial activity of the credit institution in order to manage ML/TF risk.
  1. Requirements of the Regulations shall apply to the employees of the credit institution whose activity directly or indirectly affects or may affect the ML/TF risk management of the credit institution or compliance with the ML/TF regulations.

2.Criteria for Evaluation of Staff Resources, Staff Workload and Qualifications

  1. In order to provide the necessary staff resources for efficient and comprehensive ML/TF risk management, the credit institution shall take into consideration at least the following criteria:
  2. commercial activity of the credit institution, scope thereof and the ML/TF risk level inherent therein;
  3. efficiency of the internal control of the credit institution;
  4. provision of an automated information system for the ML/TF risk management;
  5. staff workload;
  6. staff qualifications.
  1. When considering the staff workload, the credit institution shall take into consideration at least the following criteria:
  2. the number of customers or transactions specified for each employee;
  3. the number of customers subject to regular or enhanced due diligence and expected dynamics thereof;
  4. the number of analysed cases regarding characteristics of potential ML/TF and expected dynamics thereof;
  5. the number of requests from correspondent banks and expected dynamics thereof.
  1. When determining the qualifications necessary for staff, the credit institution shall take into consideration at least the following criteria:
  2. duties and responsibilities of an employee;
  3. an employee’s level of education;
  4. an employee's experience in the financial sector;
  5. an employee's previous experience in the ML/TF;
  6. an employee’s language skills;
  7. the level of professional certification of an employee in the ML/TF.
  1. The credit institution shall ensure appropriate staff replacement during absence thereof.

3. Staff Training

3.1.General Provisions

  1. The credit institution shall specify in the internal regulations thereof the relevant categories of employees which should be provided with the ML/TF training.
  1. Providing the specified categories of employees with the ML/TF training, the credit institution shall take into consideration the knowledge and qualifications necessary for the duties, responsibilities and authorisation of staff. The credit institution shall, within the framework of the training organised by the credit institution, explain to staff the ML/TF requirements and provide detailed information on the measures and activities the staff are expected to conduct within the framework of their responsibilities.
  1. The credit institution shall develop and document a staff training plan which contains at least the following programmes:
  2. an internal training programme for staff of the credit institution which uses internal training resources (hereinafter referred to as the “internal training” );
  3. an external training programme for staff of the credit institution which uses external training resources, including participation of foreign experts (a qualified person in the ML/TF area) (hereinafter referred to as the “external training”);
  4. a training programme for new employees (employees who have just started to perform their duties, or changed position at the credit institution) (hereinafter referred to as the “new staff training”).
  1. In addition to the internal training referred to in section 10.1 of the present Regulations, the credit institution shall ensure extraordinary staff training in the cases referred to in section 28 of the present Regulations.
  1. Staff training plans shall be approved by the Board of the credit institution.
  1. Upon provision of the training referred to in sections 10.1., 10.3 and 11, the credit institution shall test staff knowledge, except for the cases specified in sections 28.1, 28.2 and 28.3 of the present Regulations.
  1. The credit institution shall ensure that the information on the conducted staff training is saved by documenting the following data:
  2. name of the training;
  3. personal data of the trained employee;
  4. position and structural unit of the trained employee;
  5. training venue;
  6. head and organiser of the training;
  7. time of training;
  8. duration of the training;
  9. result of knowledge tests and certificate obtained, if any.
  1. The credit institution shall store the personal data of staff referred to in sections 14 and 27 of the present Regulations for five years upon termination of employment.
  1. In addition to the information referred to in section 14 of the present Regulations, the credit institution shall store the staff knowledge tests, if any, and available materials used in the training.
  1. The credit institutions shall update the training programmes in line with any modifications in internal and external regulations and supply of training programmes in the market (for provision of external training). The credit institution shall, at least once a year, assess compliance and efficiency of the training programmes and make any necessary changes thereto.
  1. The credit institution shall ensure that, in addition to the internal and external training, any employee may obtain the necessary advicefrom senior officials involved in the ML/TF risk management. The credit institution shall appoint a senior official (or officials) involved in the ML/TF risk management who will be responsible for the provision of advice.

3.2.Internal and external training provided to staff of the credit institution

  1. The credit institution shall ensure that the internal staff training includes training on at least the following issues:
  2. internal and external regulations governing the ML/TF and application thereof;
  3. liability for violations of these regulations governing the ML/TF and effect thereof on the operations of the credit institution;
  4. publicly available examples of cases of non-compliance with the ML/TF and the relevant sanctions imposed;
  5. typical practices of the credit institution regarding the ML/TF cases;
  6. ML/TF risk exposure of the credit institution and management thereof;
  7. identification and due diligence of customers in compliance with the ML/TF requirements;
  8. typologies and characteristics of suspicious transactions;
  9. the conduct of staff of the credit institution upon detection of any characteristics of unusual and suspicious transactions.
  1. The credit institution shall ensure that the external staff training includes training on at least the following issues:
  2. laws and regulations, and standards regarding the ML/TF, and application thereof;
  3. the ML/TF trends and methods used for the ML/TF;
  4. most common shortcomings detected in the ML/TF.
  1. Staff of the internal audit unit of the credit institution whose duties include the ML/TF audit shall be additionally provided with the training in the following issues:
  2. assessment of efficiency of the control function regarding compliance of the ML/TF risk control function and activity;
  3. automated information systems used for the ML/TF provision, and application thereof.
  1. Staff of the credit institution whose duties are related to subsidiaries, branches or representative offices of the credit institution, or to services of a third party, which conducts identification of customers or collects information necessary for customer due diligence in the interests of the credit institution, shall be additionally provided with the training in the following issues:
  2. legal requirements for the ML/TF of the countries in which the credit institution has its subsidiaries, branches or representative offices;
  3. legal requirements for the ML/TF of the countries in which a third party, which conducts identification of customers or collects information necessary for customer due diligence in the interests of the credit institution, operates.
  1. The credit institution shall ensure regular internal and external staff training at least once a year.
  1. The credit institution shall ensure that regular external training, at least once a year, with the involvement of foreign experts is provided to the Board Member who is responsible for the ML/TF; the person, who is responsible for compliance with the ML/TF requirements; and staff of the internal audit unit whose duties include the ML/TF audit, promoting understanding of the ML/TF issues and the current trends in application of the international ML/TF compliance standards.

3.3.Training provided to new staff of the credit institution

  1. When staff start performing their duties, the credit institution shall ensure that new staff training includes at least the following sections:
  2. the internal training issues referred to in section 19 of the present Regulations according to the duties, responsibility and authorisation of the staff;
  3. discussion section for any questions, if necessary.
  1. The credit institution shall ensure that an experienced employee, who has completed the internal training referred to in section 19 of the present Regulations and passed the relevant knowledge test, as well as completed the external training referred to in section 20, monitor performance of the duties of a new employee until the credit institution provides the new employee with the internal training in ML/TF issues.
  1. The credit institution shall document the personal data, position and structural unit of the employee referred to in section 26 of the present Regulations who monitors performance of duties of a new employee.

3.4.Extraordinary training provided to staff of the credit institution

  1. In addition to the internal training referred to in section 19 of the present Regulations, the credit institution shall ensure extraordinary staff training in ML/TF issues at least in the following cases:
  2. new internal and external regulations governing the ML/TF have entered into force and are applicable to the staff of the credit institution;
  3. significant changes have been made to the commercial activity of the credit institution, or an activity has been started in new financial services markets or customer segments;
  4. new services have been introduced which cause changes in the ML/TF risk exposure;
  5. during performance of his/her duties an employee violates the internal and external regulations governing the ML/TF due to insufficient knowledge.
  1. Having established the cases referred to in section 28 of the present Regulations, the credit institution shall provide the extraordinary training according to the specific case.
  1. Having established the case referred to in section 28.4 of the present Regulations, the credit institution shall review the conduct of the employee. The credit institution shall provide the employee with training and test his/her knowledge, unless otherwise stipulated.

4. Final Provisions

31.The credit institution shall specify in its internal regulations the categories of employees which should be provided with the ML/TF training, and develop and approve the training plan for the employees referred to in section 10 of the present Regulations by 28.02.2017.

32.The credit institution shall ensure by 30.04.2017 that all necessary measures are taken in order to fully apply the requirements of the present Regulations.

33. Recommendations No.237 “Recommendations to Credit Institutions for Provision of Staff Resources for Money Laundering and Terrorist Financing Risk Management” issued by the Financial and Capital Market Commission on 23.12.2015 shall be declared invalid.

Financial and Capital Market Commission

Deputy Chairperson G. Razāne

THIS DOCUMENT IS SIGNED IN ELECTRONIC FORM

WITH A SECURE ELECTRONIC SIGNATURE AND CONTAINS A TIME-STAMP