CRS and bank compliance issues were discussed at the seminar "How the banking control functions"


More than 40 delegates took part in the Moscow seminar "How the banking control functions" hosted by the CLIFF Law Firm with the support of PNB Banka.


The primary focus was on the issues related to the bank compliance in Russian and foreign banks. Moreover, the participants also discussed the topical issue of automatic exchange of financial information (CRS) and control over accounts of Russian residents outside their national territory.


The key rapporteurs of the seminar were the experts of CLIFF, in whose portfolios there are tens of successfully implemented projects.


Representatives of PNB Banka"s agents in Moscow Ilya Rivkin and Yelena Prozorova also took part in the conference. They told the delegates about the requirements of the Latvian banks when opening accounts to international clients, touched on the CRS issues and the role of banks in the expert analysis of big transactions.


"On today's market, there is still a belief that the Latvian banks do not open accounts to international clients. However, this is not the case," says Ilya Rivkin. – "PNB Banka, for example, continues to work with clients from different countries. The only thing that matters is the client"s compliance with the Latvian and international laws and regulations."


According to him, PNB Banka carries out enhanced due diligence of clients prior to opening an account.


"When opening an account, banks examine a legal document package considering the client"s jurisdiction, analyse mandatory or audited reports, request information on their office and availability of employees. Under the analysis of the financial and economic activity, the banks may request information on counterparties and connections with offshore business. Additionally, the origin of financial resources and tax residencies of beneficiaries undergo a thorough analysis. Also, clients are being analysed as to sanctions and their relationship with politically exposed persons", – noted Ilya Rivkin.


Today, another highly demanded service provided by PNB Banka is counselling of clients on the execution of complex transactions.


"Usually, such transactions include the sale of bad assets with complex structure, the sale of shares, M&A transactions, as well as transactions with expensive real estate. In this case, the main task of the bank is the execution of the transaction considering its in-depth analysis and based on individual terms and needs of the client. Moreover, participation of the bank allows mitigating the risks to all the participants", said Ilya Rivkin.


In his opinion, it is important to involve banks in the expert evaluation at the earliest stage possible: "All too often participants create such a transaction structure that ultimately banks refuse to execute the transaction based on it. As a result, it is necessary to start all over again. For this reason, we strongly recommend clients to contact immediately the bank that will conduct a thorough KYC analysis of parties to the transaction, examine its subject matter (confirmation of costs and economic expediency of the transaction) and offer the most appropriate banking products (escrow accounts, letters of credit, etc.)".