Latvia’s OECD Membership Gets a Knock
- New Europe Investor
- October 22, 2015
Hopes for Latvia’s OECD membership have taken a serious dent, following the release of a report by the Organisation’s Working Group on Bribery and Corruption.
The report detailed serious weaknesses in the country’s anti-corruption agency. It stated that Latvia’s anti-corruption law enforcement agency (KNAB), has not done enough to enforce legislation against corruption in the country.
Latvia, according to the report, still has problems associated with money laundering in it’s banks, false accounting and bribery allegations.
14 of Latvia’s 20 banks specialise in foreign clients, known as ‘non-resident deposits’ (NRDs), primarily from Eurasian countries and Russia. It is often described as a bridge for financial capital from the east to the west. Allegedly foreign deposits, represent 40% of the country’s GDP. It is even alleged that most of the money allegedly stolen from Moldova in a national scandal currently playing out there, was laundered through Latvian banks.
The report states that incidences like this, ‘call into question’ KNAB’s ability to do its job. The OECD have acknowledged some action, but believe that more needs to be done.
Latvia originally expressed interest in joining the Organisation for Economic Cooperation and Development (OECD) in 1996, but did not begin formal negotiations until 2013.