U.S. ambassador to Latvia sends warning over corruption

On December 9, to coincide with International Anti-Corruption Day, the U.S. embassy published a statement from Bikoff Pettit on Latvian corruption.

“I want to tell you – as your friend and as someone who wants to see Latvia succeed and prosper – Latvia can and must do better in its fight against corruption.”

“There are reports of serious corruption in almost every major aspect of society and government in Latvia: government procurement, healthcare, construction, EU-financed development projects, the insolvency and judicial systems, banking, political party financing, and transportation, to name a few,” she said.

“Make no mistake – corruption in Latvia is not a victimless crime. Corruption has consequences. Major investors, both foreign and domestic, tell me that the costs of corruption here discourage them from making more investments in Latvia, causing the country to lose out on high-paying jobs that could bolster economic growth, keep Latvia’s bright and well-educated young people from moving abroad, and entice those who already left to return home with their families. Some business leaders say that if the situation doesn’t improve soon, they will pull their investments out of Latvia. We recently learned that a major investment in one of Latvia’s key strategic sectors fell apart at the last minute because of the foreign investors’ concerns over corruption.”

She decline to identify the investment in question.

“More must be done so investors do not view Latvia as being a haven for money laundering and illicit finance. Unless Latvia demonstrates significant and tangible progress before the Council of Europe’s next MONEYVAL assessment, corruption in the banking sector may contribute to Latvia being gray listed – a designation of countries with poor money-laundering controls. This would even further isolate Latvia from the international business and banking communities,” the ambassador continued.

So, for the U.S., what is to be done?

“To date, the penalties imposed against Latvia-based banks involved in money laundering scandals have been paltry”.

On the judiciary, she said: “Even if these criminals are convicted, they often receive reduced sentences because the trial took so long. This is not a deterrent. This does not deliver justice to the real victims of corruption – the Latvian people. Harsher penalties to individuals and companies send a clear message that corruption will not be tolerated in Latvia.”

The EU continues to struggle with its eastern states, with problems stretching far beyond Latvia. But there is a growing sense that real progress must be seen from the bloc’s newer members without too much delay.

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