Bank of Latvia begins mediation over account for company with Buffett as beneficiary — LSM English
The Bank of Latvia has begun mediation in the case of opening an account for the new Latvian company MiTek Baltic, whose ultimate beneficiary is American billionaire investor Warren Buffett. The regulator has already contacted MiTek Industries and requested explanations from two commercial banks, LSM English reports.
An account has not been opened for four months
MiTek Baltic, a supplier of timber construction equipment and engineering services, has operated in Latvia for 18 years. This year, its Swedish parent company, MiTek Industries AB, decided to separate the Latvian unit into an independent limited liability company.
MiTek Baltic head Intars Dicmanis said that the company is already registered and has a VAT payer number, but has been unable to open a full corporate account with any Latvian bank for four months. A temporary account was opened for it, but it cannot be used for daily operations.
According to Dicmanis, the banks requested information about the ultimate beneficial owner, including a passport copy, passport details and a social security number. He linked the issue to financial monitoring requirements and said that the lack of an account was holding back the company’s planned financing and development.
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Possible link to FATCA
The Foreign Investors Council in Latvia, which the company approached, called for a practical solution in cases where the beneficiary’s identity, ownership and control can be verified through reliable independent sources, but the details of a specific document cannot be provided. FICIL stressed that requirements for information about beneficiaries should be proportionate and should not unjustifiably hinder the start of business operations.
Edgars Pastars, a partner at the law firm Cobalt, said that passport details should be required under the amended anti-money laundering law only where there is a high risk. At the same time, he suggested that the bank may have assessed the risks in the specific case without having all its details.
The Bank of Latvia said that, according to preliminary information, the problem may be linked not only to the Latvian side but also to the US FATCA law. It requires banks to obtain a client’s taxpayer identification number and report on US tax residents. The mediation is intended to establish all the circumstances of the company’s interaction with the banks it approached.
