Conditions Attached to Operations by Way of the Freedom to Provide Services
in Latvia
A Member State bank intending to provide financial services in Latvia under the freedom to provide services shall takeaccount of the following essential provisions required by Latvian legal acts:
1. Credit Institution Legal Acts
Credit Institution Law (available on the official website of the Financial and Capital Market Commission in English: . )
The supervisory authority of financial and capital market is the Financial and Capital Market Commission.
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Commencing the banking business in Latvia
A Member State bank is entitled to engage in banking business in Latvia under the freedom to provide services, as laid down in Article 121, Paragraph 4 and 5 of the Credit Institution Law.
Relationships between credit institutions and clients
Relationships between a credit institution and a client shall be regulated by law and by the contracts that have been entered into. It is the duty of a credit institution to guarantee the confidentiality of the identity, accounts, deposits and transactions of clients.
Information regarding the accounts or and the transactions conducted by natural persons shall be provided to such persons themselves and to their lawful representatives. Information regarding the accounts of and the bank operations (transactions) conducted by legal persons shall be provided to authorized representatives of such legal persons and to their highest institutions pursuant to the request of the heads of such institutions.
Information regarding a client, his or her accounts and transactions performed in accordance with a written agreement shall be provided to third persons if in respect of such provision of information to a third person, the client has unequivocally consented with an agreement entered into with the credit institution.
For more detailed provisions on relationships between credit institutions and clients, please, refer to Chapter V the Credit Institution Law.
Confidentiality provisions
The confidential information at credit institution’s disposal shall be submitted to the selected State institutions or officials in accordance with the procedures specified by the Credit Institution Law.
The list of such institutions and officials as well as the cases and conditions when the confidential information has to be disclosed is provided in Article 63 and 631 of the Credit Institution Law.
The accountability for disclosure of confidential information is provided in Article 64 of the Credit Institution Law.
Review of client complaints
A credit institution shall ensure that the procedure of examination of client submissions and complaints (disputes) regarding provision of the financial services thereof is efficient. Written information regarding the procedure of examination of the referred to submissions and complaints (disputes) shall be freely available at the credit institution and in electronic form on the Internet home page of the credit institution.
For more detailed provisions on review on client complaints, please, refer to Article 74.1 and 74.2 of the Credit Institution Law.
Supervision of cross-border service providers
Pursuant to Article 108.1, if the Financial and Capital Market Commission determines that a bank registered in a Member State providing financial services without opening a branch performs operations that are in contradiction with Latvian law, it shall, without delay, request that the Member State bank terminate such operations and, if the aforementioned bank does not discontinue operations that are in contradiction with Latvian law, the Financial and Capital Market Commission shall without delay, inform the supervisory authority of the relevant Member State, the duty of which is to act so that the violations are rectified. If the bank continues to perform operations that are in contradiction with Latvian law, the Financial and Capital Market Commission shall inform the relevant Member State supervisory authority, and shall take measures to rectify such violations. The requirements of this Article shall not prevent the Financial and Capital Market Commission from performing activities to rectify violations that are in contradiction with Latvian laws safeguarding public interests and to apply penalties to such banks.
The provisions of Article 1081 shall not hinder a bank that is registered in a Member State from disseminating advertising in Latvia regarding the financial services provided by the bank.
2.Deposit Guarantees
The provisions of the respective Law of the credit institution's home member state are applicable to guarantees on deposits attracted by providing financial services in Latviawithout opening a branch.
3.Consumer Protection
Consumer Rights Protection Law (available on the official website of the Consumer Rights Protection Centre in English:
Consumer Rights Protection Centre is the civil authority which enforces the protection of consumer rights and interests. The Operation of the Centre is based on the Consumer Rights Protection Law that is the main legislative act, and it is basis for consumer right protection field.
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The Consumer Rights Protection Law applies to all contracts concluded between consumers and service providers (banks).
It should be particularly noted that pursuant to the Latvian Consumer Rights Protection Law a consumer is a natural who expresses a wish to utilize or utilizes a service for a purpose which is not directly related to his or her entrepreneurial activity.
Chapter II of the Consumer Rights Protection Law concerns the regulation of contractual terms and conditions and takes into account the provisions of the respective EU Directives and Regulations on unfair terms in consumer contracts.
For more detailed provisions on consumer protection, please, refer tothe Consumer Rights Protection Law.
4. Data Protection
Personal Data Protection Law: (available on the official website of the Data State Inspection in English; )
The supervision of personal data protection shall be carried out by Data State Inspectorate.
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The Personal Data Protection Law applies to the automatic processing of personal data when these data constitute, or will be used to constitute, a register of personal data or part thereof. The Law contains provisions on general principles related topersonal data processing, the processing of sensitive information and personal codes, the rights of registered parties, data security and the storage of data.
5.Taxes
Law on Taxes and Fees (available on the official website of the State Revenue Service in English: )
The State Revenue Service is a state institution which ensures the accounting of tax payments and taxpayers, the collection of taxes, duties and other mandatory payments specified by the State in the territory of the Republic of Latvia, collects taxes, duties and other mandatory payments into the budget of the European Union and implements the customs policy and organizes customs matters.
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For more detailed information on tax regime in relation to cross-border services, please, refer to the State Revenue Service.
6.Other Provisions
Furthermore, the Financial and Capital Market Commission would like to draw your attention to the following general legislation which is not exhaustive:
•The Law on the Financial Instruments Market
•The Civil Law
•The Competition Law
•The Law on Advertising