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    BlueOrange Bank, previously known Baltikums fined over AML violations

    BlueOrange Bank, the first provider of contactless cards in its home country Latvia, was fined in December 2018 after it agreed to settle with the Financial and Capital Market Commission (FKTK) for alleged violations of the Law on Prevention of Money Laundering and Terrorism Financing. These violations include sufficient attention to customer transactions, and the failure to identify and report suspicious transactions to the Latvian Financial Intelligence Unit.

    Although the bank, formerly known as Baltikums Bank, significantly improved its internal control systems, the settlement was agreed at 1.246.798 Euro, after it was reduced from 3.6 million Euro. The fine is the result of stricter AML regulation and the changes in the foundations of the banking system in Latvia that historically relied on non-resident customers from the Soviet Area. Non-resident deposits and some of its account holders triggered a capital outflow from Latvian banks after the forced closure of ABLV Bank, that was considered a primary institute of money laundering concern and was banned from transacting in US Dollars in early 2018.

    The current clean-up of the European banking sector already caused several banks in Malta, Cyprus and Latvia to close, whilst the scandal of Danske Bank Estonia revealed shortcomings to comply with AML regulations and placed it as a major concern on the pollical agenda.

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