Compliance

Regulatory rules of bank's operation

The safety of depositors’ funds shall be guaranteed by the deposit guarantee system created in accordance with the Deposit Guarantee Law of the Republic of Latvia.
According to the Deposit Guarantee Law, should the funds placed with AS PrivatBank (hereinafter referred to as the Bank) become unavailable, each Bank customer (both individuals and legalentities) will receive a compensation in the amount of up to 100,000.00 EUR from the Deposit Guarantee Fund for any deposit placed in any currency (for all accounts in aggregate if there are several accounts opened with the Bank). The guaranteed compensation shall be paid in EUR (Euros). The Deposit Guarantee Fund provides for certain cases when a customer is entitled for 200,000 EUR compensation in addition to the maximum guaranteed compensation of 100,000 EUR.
The compensation guaranteed by the state covers the balances of settlement accounts, card accounts
as well as deposit accounts.
The Deposit Guarantee Fund was established with the purpose to guarantee that depositors are reimbursed for the deposits placed during collaboration with the deposit guarantee scheme participants in case of the unavailability of the deposits due to the following reasons:
  • the court announced the insolvency of the deposit guarantee scheme participant,
  • the Finance and Capital Market Commission annulled the guarantee scheme participant’s permit (licence) for credit institution activity/loan or saving institution activity,
  • the Finance and Capital Market Commission determined that the deposit guarantee scheme participant fails to pay guarantee deposits to depositors and, therefore, decided to announce the deposits unavailable.
Accumulation and management of the Deposit Guarantee Fund funds as well as payments of compensations are carried out by the Financial and Capital Market Commission. Reimbursement of guaranteed deposits is completed within the timeframe indicated in the Deposit Guarantee Law.
AS PrivatBank uses the Deposit Guarantee Fund logo placed in this message on protection of deposits upon request of the Financial and Capital Market Commission and in accordance with the permission granted to all members of the Deposit Guarantee Fund.
Provisions of the Deposit Guarantee Law are available at https://likumi.lv/doc.php?id=274737
For more information on the deposit guarantee, please visit the homepage of the Financial and
Capital Market Commission www.fktk.lv.

AS “PrivatBank” (hereinafter – the Bank) is a member of the depositor protection system of the Republic of Latvia as a credit institution registered and licensed in the Republic of Latvia holding a permit of the Financial and Capital Market Commission to provide investment services and accompanying investment services.

In accordance with the Investor Protection Law, a Bank customer – investor is eligible for compensation of lost financial instruments and for losses resulting from a non-executed financial service in a situation where the Bank fails to fulfil its liabilities towards the customer in full and within the term due to reasons directly related to the Bank’s financial standing but not in a situation when execution of an investment service failed in the course of the Bank’s regular operations. The compensation amount per investor is 90 per cent of the financial instruments lost but not more than 20,000 EUR..

The customer should submit their compensation applications to the Financial and Capital Market Commission within a year after the customer found out that the Bank had failed to fulfil the above liabilities but not later than within five years after such failure.

Compensation is paid to the investor if they are not mentioned in Article 7 of the Investor Protection Law to whom no compensation is paid, including but not limited to:

  • system members, insurance companies, investment companies or other investors that had informed that they are or are deemed professional investors;
  • pension funds;
  • the state and municipalities;
  • persons about whom the Financial and Capital Market Commission has stated that they received higher interest rates or financial concessions or used circumstances that caused financial difficulties to or deterioration of financial standing of a system member on the basis of special provisions of individual agreements.

Please note that the Investor Protection Law doe not apply to cases when investors incur losses resulting from fluctuation of financial instrument prices or non-liquidity of financial instruments.

Provisions of the Investor Protection Law are available here: https://likumi.lv/doc.php?id=55829.

The Single Euro Payments Area allows all consumers, companies and government institutions from any European country to make and receive payments in euros across countries as well as within national borders, based on equal provisions, rights and obligations.

The SEPA is intended to equalise the use of payment instruments (SEPA credit transfers, SEPA card payments and SEPA direct debit payments), specifying that both national and cross-border euro payments must be executed with equal speed, security and simplicity.

SEPA payment standards:

  • Payment currency – the euro;
  • The payment is sent to a bank in a European Union member country, Iceland, Liechtenstein, Monaco, Norway or Switzerland;
  • The recipient’s account must be in IBAN format; The recipient bank’s identification code (SWIFT/BIC) must be specified;
  • The payment applicant pays only the commission fee specified by their bank (covered partially);
  • The details of the recipient and the recipient bank must be accurate.

The Credit Register of the Bank of Latvia was launched on 1 January 2008. It is a national information system. In the Credit Register the Bank of Latvia collects, accumulates and stores data on the customers and customers’ guarantors of the Credit Register participants and restricted Credit Register participants, their liabilities and performance thereof.

As of 1 December 2012, the activity of the Credit Register is governed by:

The Credit Register data are informative and do not serve as a proof of the customer’s and customer guarantor’s liabilities and existence or non-existence of their default.

More detailed information is available on the website of the Bank of Latvia.

The EMIR requirements refer to AS PrivatBank and the Bank’s customers (legal entities) who conduct transactions with OTC derivatives.

What is EMIR?

European Market Infrastructure Regulation (hereinafter – EMIR) is a set of the European normative documents on transactions with derivatives. The main document is the Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories.

EMIR Requirements:

  • to improve risk management standards of the Bank;
  • to report transactions with OTC derivatives to a newly established institution – trade repository;
  • to perform central clearing for OTC derivatives.

Transactions Subject to EMIR Requirements

EMIR requirements apply to transactions with OTC derivatives, such as: currency forwards, options, swap, margin forwards, etc.

Complete range of the transactions is listed in the Directive 2004/39/EC Annex I Section C Articles 4 – 10.

Reporting Transactions

Information on transactions with OTC derivatives shall be reported to trade repository within one business day following the conclusion or modification of the transaction.

Trade repositories are special organisations that collect, process, analyse, store and transfer information about transactions with derivatives to supervisory authorities.

In order to ensure provision of information on transactions to trade repositories, all legal entities – residents of the EU must obtain LEI (Legal Entity Identifier) identifier, as explained below.

Pre-LEI/LEI is a 20-character, alpha-numeric code that allows to uniquely identify each legal entity that engage in financial transactions as a counterparty. Pre-LEI/LEI system is based on the world-wide standards. Pre-LEI/LEI number may be obtained from organisations that are authorised to issue Pre-LEI/LEI numbers. Prior to issuing Pre-LEI/LEI number, the aforementioned organisations conduct evaluation of the customer. A charge may be collected for registration and maintenance of Pre-LEI/LEI number.

A complete list of organizations authorised to issue numbers Pre-LEI/LEI can be found on the Internet at:
https://www.leiroc.org/list/leiroc_gls/tid_162/index.htm or https://www.leiroc.org/publications/gls/lou_20131003_2.pdf

Customers shall independently contact the organisation that issue Pre-LEI/LEI and provide all necessary information (register), as well as take measures to obtain Pre-LEI/LEI number.

Registration of Pre-LEI/LEI number is a paid service, the procedure takes approximately 1 week. The customer shall bear all costs related to assignment of Pre-LEI / LEI number.

Risk Mitigation Measures:

  • timely confirmation of transactions,
  • portfolio reconciliation,
  • dispute resolution and other obligations.

EMIR requirements impose obligation to conclude an agreement between the parties on a periodic reconciliation of the outstanding transactions with the other party.

Clearing of Transactions Through a Central Counterparty (CCP):

The obligation of clearing applies to standardised OTC derivatives. List of derivatives subject to the clearing obligation is published on the ESMA (European Securities and Markets Authority) website: www.esma.europa.eu.

Clearing obligation applies to the financial sector counterparties, and counterparties outside the financial sector that exceeds the so-called clearing threshold. Clearing threshold is set so that it could be exceeded only by enterprises with very large speculative positions in derivative transactions (e. g. speculative position in interest rate or currency derivatives in the amount of over 3 billion euros). The clearing threshold shall be calculated for the group rather than for legal entities.

Classification of Counterparties:

Application of the EMIR requirements depends on classification of the counterparties, namely, whether the counterparty is a financial or non-financial counterparty, and – in case of non-financial counterparty – on the type of transactions conducted by the counterparty, their purpose and their amounts. Classification of the counterparties pursuant to the EMIR requirements differs from customer classification in accordance with the conditions of Markets in Financial Instruments Directive (MiFID). According to the EMIR requirements the financial counterparties are, among others, banks, insurance companies, fund management companies, occupational pension funds, and central counterparties. All other companies are non-financial counterparties.

Additional Information on EMIR:

Detailed information is available on the ESMA website: https://www.esma.europa.eu/regulation/post-trading/otc-derivatives-and-clearing-obligation#title-paragrah-2.

If you have any questions, please contact the Bank by calling toll-free number 80001515, contact your personal customer consultant or write us to welcome@privatbank.lv

The Foreign Account Tax Compliance Act (FATCA)

The Foreign Account Tax Compliance Act (FATCA) is a US legislation that was enacted in March 18, 2010 and that will enter into force on July 1, 2014. FATCA is essentially a regulatory reporting requirement for foreign financial institutions on their US account holder base. All units of  AS “PrivatBank” have recognized the importance of FATCA and comply with the FATCA requirements.

AS “PrivatBank” has already registered itself on the U.S. IRS website with the FATCA Status “Registered Deemed-Compliant Financial Institution (including a Reporting Financial Institution under a Model 1 IGA)” and has received “Q951B6.99999.SL.428” as Global Intermediary Identification Number (GIIN).

If you have any further questions, please contact the FATCA Responsible Officer.
E-Mail: fatca@privatbank.lv

FATCA is the Foreign Account Tax Compliance Act of the United States of America the main objective of which is the fight against tax evasion that is carried out or might be carried out by subjects of FATCA Act. Measures and requirements of FATCA have been introduced on the territory of the Republic of Latvia with effect from 1 July 2014 in accordance with the Law of the Republic of Latvia On Agreement between the Government of the United States of America and the Government of the Republic of Latvia to Improve International Tax Compliance and to Implement FATCA and Regulation of the Cabinet of Ministers No.134 of 24 March 2015 Procedure for Providing Information to the State Revenue Service in Order to Ensure Compliance with the Requirements of the law On Agreement between the Government of the United States of America and the Government of the Republic of Latvia to Improve International Tax Compliance and to Implement FATCA.

According to FATCA requirements AS PrivatBank (hereinafter – the Bank) shall ensure annual gathering and examination of information on those customers who correspond to the status of subject of FATCA, as well as shall provide information to the State Revenue Service on financial accounts which are directly or indirectly owned by the US tax residents.

In accordance with the aforementioned regulatory requirements the Bank collects, examines and transfers to the State Revenue Service information about those customers who correspond to the status of subject of FATCA. In order to ensure availability of information necessary for examination, the Bank requests the customers to fill out the FATCA questionnaire and to provide documentary evidence (e. g. the US Internal Revenue Service tax forms) and additional information on tax residency of the customer and their beneficial owner(-s).

The Bank assesses the compliance of natural person who has opened a financial account in the Bank with the direct or indirect FATCA criteria to determine whether the Customer is a subject of FATCA:

  • the account holder is a US citizen (including dual or multiple citizenship) or a US resident (a person with work permit or a Green Card holder);
  • the account holder was born in the US;
  • current postal address or residential address of the account holder is in the US (including the US post office box number), current phone number of the account holder is in the US, the account holder has issued a standing order to transfer funds to an account in the US, the account holder has issued a valid power of attorney or has granted signature rights to a person with an address in the US, the account holder is associated with an address in the US, or correspondence addressed to the account holder is sent to an address in the US, which is the only address of the account holder known to the Bank.

The Bank assesses the compliance of legal person who has opened a financial account in the Bank with the direct or indirect FATCA criteria to determine whether the Customer is a subject of FATCA:

  • the account holder is a tax resident of the US;
  • a shareholder / founder of the account holder (with at least 25% of the shares) is a US registered company;
  • the account holder has a branch, a representation office, an office, etc. in the US;
  • legal entity is a passive non-financial organisation with one or several beneficial owners who are subjects of FATCA;
  • current phone number of the account holder is in the US, the account holder has issued a standing order to transfer funds to an account in the US, the account holder has issued a valid power of attorney or has granted signature rights to a person with an address in the US, the account holder is associated with an address in the US, or correspondence addressed to the account holder is sent to an address in the US, which is the only address of the account holder known to the Bank.

The Bank is registered on the US Internal Revenue Service website with the FATCA status “Registered Deemed-Compliant Financial Institution” (including a Reporting Financial Institution under a Model 1 IGA) and has received the following Global Intermediary Identification Number (GIIN) Q951B6.99999.SL.428.

OECD CRS

OECD CRS is the Standard for Automatic Exchange of Financial Account Information developed by the Organisation for Economic Co-operation and Development (OECD), the main objective of which is to promote the fight against cross-border tax fraud and to prevent tax evasion. The requirements of the CRS standard were introduced on the territory of the Republic of Latvia with effect from 3 December 2015 pursuant to the law On Taxes and Fees and Regulation of the Cabinet of Ministers No. 20 of 5 January 2016 Procedures for financial institutions on performing due diligence of the financial accounts and submitting information on financial accounts to the State Revenue Service”.

In accordance with the OECD CRS requirements tax administrations around the world shall obtain information from financial institutions and once a year automatically exchange this information on taxpayers of the relevant countries. More than 100 countries have joined the OECD CRS, including the member states of the European Union, Argentina, Barbados, Bermuda, Gibraltar, the Commonwealth of Dominica, India, Iceland, Cayman Islands, Colombia, Russia, Mexico, Korea, Republic of Seychelles, Republic of South Africa and others.

Under the aforementioned regulatory requirements the Bank collects, examines and transfers to the State Revenue Service information about those customers who correspond to the status of the subject of OECD CRS. In order to ensure availability of information necessary for examination, the Bank requests the customers to fill out particular sections of the Customer questionnaire (tax residency self-certification) and to provide documentary evidence and additional information on tax residency of the customer and their beneficial owner(-s).

The Bank assesses the compliance of natural person who has opened a financial account in the Bank with the direct or indirect CRS Standard criteria to determine whether the Customer is a subject of CRS Standard:

  • the account holder is a tax resident of the participating country;
  • current residential or correspondence address of the account holder is in the participating country (which is confirmed by documentary evidence), the account holder has a phone number in the participating country, but has no phone number in Latvia, the account holder has a valid order for regular transfers of funds to the participating country (except for transfers from a deposit account), the account holder has issued a valid power of attorney or has granted signature rights to a person with an address in the participating country, the only known address of the account holder is an address for collecting correspondence in the participating country.

The Bank assesses the compliance of legal person who has opened a financial account in the Bank with the direct or indirect CRS Standard criteria to determine whether the Customer is a subject of CRS Standard:

  • the account holder is a tax resident of the participating country;
  • the account holder is established or registered in the participating country;
  • legal, actual address of the central office or correspondence address of the account holder is in the participating country;
  • legal entity is a passive non-financial organisation with one or several beneficial owners on whom the reports shall be submitted in accordance with CRS standard.

To the Attention of the Customers

The Bank invites the customers to carefully study the information on issues related to their tax residency and tax residency of their beneficial owners, and immediately inform the Bank of changes to previously submitted information that may affect customer’s or their beneficial owners’ correspondence to the subject of FATCA or OECD CRS. It is necessary to take into consideration that each country has developed its own specific rules on determining the tax residence. Additional information about tax residency rules of each OECD CRS participating country is available here. Additional information on determination of tax identification number is available here.

To ensure fulfilment of the requirements of OECD CRS and FATCA, the Bank may contact customers and their beneficial owners in order to request information or documents that confirm their tax residency. The Bank invites the customers to promptly provide all requested information or documents confirming the customer’s or their beneficial owners’ tax residence upon the Bank’s request.

MIFID II

As from 3 January 2018, investment service providers are obliged to comply with the requirements of the Markets in Financial Instruments Directive 2014/65/EU (MiFID II) https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=celex%3A32014L0065, which will affect all investors who execute transactions in financial instruments.

What does MiFID II mean?

The Markets in Financial Instruments Directive (MiFID) that regulates rendering of financial investment services has been effective in Latvia since 2007. The requirements of MiFID II are to be considered as the next step aimed to provide additional protection to investors, and promote the transparency of financial markets in terms of transactions in financial instruments.

Additionally, investment service providers shall comply with the MiFIR regulation which is related to the MiFID II.

In 2018, the requirements of MiFID II will be implemented in the regulatory enactments of the Republic of Latvia, including the Financial Instrument Market Law; in turn, the requirements of MiFIR apply to investment service providers directly.

For investors, MiFID II requirements will ensure:

  • additional protection by receiving more detailed information on financial instruments and investment services from the issuers of financial instruments and providers of services;
  • more transparent financial market.

With the implementation of MiFID II, customers will be able to receive more detailed information on financial instruments and the associated risks, potential costs etc., as well as on the financial transactions.

MiFID II applies to:

  • such financial instruments as stocks, shares, structured deposits, bonds, currency swap transactions, interest rate swap transactions etc.,
  • as well as such investment services as accepting and executing customer orders, investment consultations, and portfolio management.

 

We hereby inform, that AS “PrivatBank” (hereinafter referred to as the Bank) does not settle payments, which involve the natural persons and legal entities (hereinafter jointly referred to as the persons) included in the international or national sanction lists, or the persons, which belong to the persons included in these sanction lists, or the persons, which are controlled by such persons, as well as ensures that other defined sanction limitations and prohibitions (for instance, prohibitions on import and export of certain kind of products) are not violated.

In order to ensure implementation of requirements of regulatory enactments on sanctions, the Bank carries out additional verifications of payments, which is why, settlement of payments might be delayed, and the Bank might request additional information and documents regarding incoming and outgoing payments and cooperation partners from the customers. Having stated possible payment relation to limitations or prohibitions defined by the regulatory enactments on sanctions, the corresponding payment will be suspended during verification, and additional information and documents might be requested from the customers.

AS “PrivatBank” asks that before commencement of business relationships, its customers acquire information on their cooperation partners and on spheres of partner activities (paying particular attention to transactions, which involve subjects from the Russian Federation, or which are related to export / import of products to / from the Russian Federation).

IMPORTANT! Sanctions defined by the European Union are in force throughout the European Union, and are binding to every subject of the European Union (both to a natural person and to a legal entity).

Useful links

  1. Regulatory enactments of the European Union in the sphere of sanctions
  2. Sanction limitations and prohibitions defined by the United States of America
  3. Information by the Financial and Capital Market Commission regarding international financial sanctions (in latvian)

Procedure of considering applications and complaints

Procedure for Considering Applications / Complaints of AS PrivatBank (Bank) Customers

Any dispute arising between a Customer and the Bank shall be settled by negotiation; the disputing parties shall strive to reach an agreement.

Should the disputing parties fail to settle the dispute by negotiation, a Customer may submit the Bank applications/complaints as follows:

  • orally or in writing , visiting the Bank in person;
  • calling the emergency hotline:
    • Latvia +371 6728 1995 (24/7) or toll-free information landline 80001515 workdays from 8.00 a.m. to 9.00 p.m., weekends and holidays – from 9.00 a.m. to 6.00 p.m. / Customers residents of German Federal Republic – tel. 080050444458 workdays from 9.00 a.m. to 6.00 p.m.;
    • Italy +371 67041300 workdays from 8.00 a.m. to 9.00 p.m.;
  • via online chat:
    • Latvia – workdays from 8.00 a.m. to 9.00 p.m.; weekends and holidays – from 9.00 a.m. to 6.00 p.m.;
  • by fax:
    • Latvia +371 6728 2981;
  • by e-mail: welcome@privatbank.lv, kundenservice@privatbank.lv, customer_support@privatbank.lv, privatbank@pec.it, info@privatbank.lv, info@privatbank.it;
  • online, completing the feedback form on the Bank’s website www.privatbank.lv/enhttps://privatbank.lv/en/voprosi-jalobi-predlojeniya/;
  • by remote account management services (message);
  • by mail to the address:
    • Latvia: Muitas iela 1, Rīga, LV-1134, Latvija;
  • by SMS to the Bank’s official mobile phone number +371 28665509.

Taking into account that the Bank is engaged in insurance brokerage and renders broker services to insurance companies on the basis of cooperation agreement, the abovementioned procedure for considering customer applications / complaints also applies to applications/complaints regarding the Bank provided insurance brokerage services. Upon complaint about the Bank provided insurance brokerage services, the Bank within five (5) business days shall transfer the complaint to the relevant insurance company, notifying the complainant accordingly.

Please, specify the following information in your written application / complaint:

  • individual customers – name and surname or name and surname of the authorised person;
  • corporate customers – the company name and the name, surname of the representative/authorised person;
  • account number (customers of the Bank);
  • essence of the application / complaint, the related circumstances and claims;
  • refund method (in case of material claims towards the Bank);
  • preferable way of reply (via online bank (Privat24), by mail (specify the mailing address), by e-mail (specify the e-mail), by fax (specify the fax number);
  • date of filing the application / complaint.

The application / complaint should be signed according to the provisions of normative acts.
Copies of transaction supporting documents, as well as other documents justifying the application/complaint (if any) shall be appended.

The Bank will consider applications / complaints as soon as possible and provide the feedback:

  • to Customers, which are consumers – within 15 (fifteen) business days; to Customers, which are not consumers – within 30(thirty) calendar days.

If the Bank needs more time to investigate and clarify the facts and circumstances specified in the application/complaint, the Bank would extend the application / complaint consideration term notifying the complainant thereof via the same communication channels the application / complaint was sent (online bank (Privat24), e-mail, mail), unless another way of reply has been specified.

The procedure for consideration of customers’ applications/complaints is regulated by AS PrivatBank General Regulations for Transactions that are available on the Bank’s website www.privatbank.lv.

You may submit a claim to the banking regulatory authority – the Financial and Capital Market Commission. More information on the complaint consideration procedure is available on the Commission website www.fktk.lv.

If you are not satisfied with the Bank’s reply and believe that the application / complaint has not been duly settled, you are entitled to submit a claim to the Ombudsman of the Association of Commercial Banks of Latvia. More information about the Ombudsman of the Association of Commercial Banks of Latvia and the procedure of consideration of claims is available on the Association website https://www.lka.org.lv/en/ombud/ (regulations https://www.lka.org.lv/lv/ombuds/reglaments.html and the rules https://www.lka.org.lv/lv/ombuds/nolikums.html).

If according to the law On Consumer Rights Protection you are a consumer, you may submit a complaint to:

  • the Consumer Rights Protection Centre to get assistance in settlement of dispute, including cases related to investment services. More information about the Consumer Rights Protection Centre and the complaint consideration procedure is available on the Centre website https://www.ptac.gov.lv/en;
  • the institution for extra-judicial settlement of consumer complaints (if any). More information about the list of institutions for extra-judicial settlement of consumer complaints and the complaint consideration procedure is available on the Centre website https://www.ptac.gov.lv/en;
  • the Commission for settlement of consumer complaints, if the assistance provided at the Consumer Rights Protection Centre has not been successful and there is a possibility of convening the Commission for settlement of consumer complaints;
  • the court.

Regarding an application / complaint, you may file a claim to a general jurisdiction court of the Republic of Latvia, or the court specified in the transaction document (a related document), which is the subject of a dispute, or a court of arbitration.

Please, mind that you may file a claim concerning an application/complaint to a general jurisdiction court or a court of arbitration regardless of whether an application/complaint to the Ombudsman of the Association of Commercial Banks of Latvia, the Consumer Rights Protection Centre, or the Financial and Capital Market Commission has previously been submitted, or not.

Regulations of the Cabinet of Ministers Nr. 631 of August 1, 2006 “Procedures for the submission and examination of consumer claims regarding the non-conformity of goods or services with contract provisions” (in latvian)

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