The translation of this document is outdated.
Translation validity: 30.06.2024.–16.10.2024.
Amendments not included:
26.09.2024.
Text consolidated by Valsts valodas centrs (State
Language Centre) with amending laws of:
17 March 2011 [shall come
into force on 30 April 2011];
12 May 2011 [shall come into force on 15 June
2011];
20 June 2013 [shall come into force on 18 July
2013];
12 September 2013 [shall come into force on 1 January
2014];
24 April 2014 [shall come into force on 28 May
2014];
30 November 2015 [shall come into force on 1 April
2016];
19 May 2016 [shall come into force on 20 June
2016];
23 November 2016 [shall come into force on 1 July
2017];
2 March 2017 [shall come into force on 28 March
2017];
26 October 2017 [shall come into force on 9 November
2017];
20 June 2018 [shall come into force on 18 July
2018];
3 April 2019 [shall come into force on 13 April
2019];
7 November 2019 [shall come into force on 12 November
2019];
17 June 2020 [shall come into force on 1 July
2020];
23 September 2021 [shall come into force on 20 October
2021];
9 November 2023 [shall come into force on 23 November
2023];
13 June 2024 [shall come into force on 30 June 2024].
If a whole or part of a section has been amended, the
date of the amending law appears in square brackets at
the end of the section. If a whole section, paragraph or
clause has been deleted, the date of the deletion appears
in square brackets beside the deleted section, paragraph
or clause.
|
The Saeima1 has adopted
and
the President has proclaimed the following law:
Law on Payment Services and
Electronic Money
[17 March 2011]
Chapter I
General Provisions
Section 1. The following terms are
used in this Law:
1) payment service:
a) service enabling the placement of cash on a payment
account, and also all the necessary operations performed by a
payment service provider to provide a payment service user the
possibility to use a payment account;
b) service enabling cash withdrawals from a payment account,
and also all the necessary operations performed by a payment
service provider to provide a payment service user the
possibility to use a payment account;
c) execution of a payment, including execution of a direct
debit, also one-off direct debit, execution of a payment through
a payment card or a similar device, execution of a credit
transfer, as well as execution of a standing order. The payment
service referred to in this Sub-clause shall also include the
transfer of money to a payment account opened by the payment
service provider of the payment service user or another payment
service provider;
d) execution of a payment, including execution of a direct
debit, also one-off direct debit, execution of a payment through
a payment card or a similar device, execution of a credit
transfer, as well as execution of a standing order. In this
Sub-clause the term "payment service" refers to a payment service
where a credit limit is applied to the money available to the
payment service user;
e) issuing of a payment instrument or acceptance of
payments;
f) money remittance;
g) [20 June 2018];
h) payment initiation service;
i) account information service;
11) service linked to a payment account - a
service that is linked to the opening, use, and closure of a
payment account, including a payment service and a payment
executed for the transfer of money at the disposal of the payee
based on any of the documents addressed to the payment service
provider and referred to in Section 3, Clause 6, Sub-clauses "a",
"b", "c", "d", "e", "f", and "g" of this Law, as well as an
overdraft and an overdraft option;
2) payment institution:
a) a commercial company which has received the payment
institution operating licence;
b) a natural or legal person who, in accordance with the
provisions of Section 5 of this Law, does not need to receive a
licence for commencing the operation of a payment
institution;
c) a natural or legal person who has received a licence for
the operation of such payment institution which only provides the
account information service;
21) electronic money institution:
a) a commercial company which has received the licence for the
issuing of electronic money;
b) a legal person which, in accordance with the provisions of
Section 5.1 of this Law, does not need to receive the
licence for the issuing of electronic money;
c) a branch of a foreign (non-Member State) electronic money
institution which has received a licence only for the issuing,
distribution, and redeeming of electronic money in Latvia;
22) electronic money - electronically (in a
smart card or computer memory) stored monetary value which:
a) is represented by a claim on the issuer;
b) is issued upon receipt of funds from the electronic money
holder for the purpose of making payments;
c) can be used as a means of payment and which is accepted by
a natural or legal person other than the electronic money
issuer;
23) average outstanding electronic money -
the arithmetic mean of the financial liabilities of an electronic
money institution resulting from the issuing of electronic money
which is calculated by adding up the amount of electronic money
at the end of each calendar day over the preceding six calendar
months and dividing the sum by the number of days in six calendar
months. The average outstanding electronic money shall be
determined on the first day of each calendar month and applied to
that calendar month;
24) electronic money holder - a natural or
legal person who has received electronic money from an electronic
money issuer or its agent;
25) institution - a payment institution and
an electronic money institution, except for the terms
"institution which is responsible for the discontinuation of
payment services, insolvency, liquidation of payment
institutions, as well as for the accounting inspection procedures
of credit institutions and other financial institutions" and
"financial institution", as well as the word combination "another
institution" used in this Law;
3) payment - an act initiated by the payer or payee the
purpose of which is placing, transferring, or withdrawing money
and which does not depend on any underlying obligations between
the payer and the payee;
31) remote payment - a payment initiated via
internet or through a device that can be used for distance
communication;
4) payment system - a money transfer system with
standardised agreement on the rules and procedures for the
processing, clearing or settlement of payment transactions;
5) payer - a natural or legal person who:
a) holds a payment account and allows a payment order from
that payment account;
b) gives a payment order if it does not have a payment
account;
6) payee - a natural or legal person who is the
intended recipient of funds to be transferred, including transfer
of funds;
7) payment service user - a natural or legal person
making use of a payment service in the capacity of a payer or
payee, or in the capacity of a payer and a payee (hereinafter
also - the service user);
71) resident of the European Union - a
citizen of Latvia, a non-citizen of Latvia, or a citizen of
another European Union Member State, state of the European
Economic Area or the Swiss Confederation, and also a person who
has the right to stay in Latvia in accordance with the laws and
regulations of the Republic of Latvia, including a person who is
an asylum seeker or who has obtained the status of a refugee or
alternative status - also if such persons have not declared their
place of residence in Latvia;
8) framework contract - a payment service contract
which governs the execution of individual and successive payments
and which may contain the obligations and conditions for setting
up a payment account;
9) money remittance - a payment service as a result of
which money if received from a payer, without any payment
accounts being created in the name of the payer or the payee, for
the sole purpose of transferring a corresponding amount to a
payee or to a payment service provider acting on behalf of the
payee, or as a result of which this amount of money is received
by the payment service provider on behalf of and made available
to the payee;
91) payment initiation service - a payment
service as a result of which a payment service provider initiates
a payment on behalf of the payment service user from a payment
account held at another payment service provider;
92) account information service - an online
service through which consolidated information regarding one or
more payment accounts held by the payment service user with
either another payment service provider or with more than one
payment service provider is provided to the payment service
user;
10) payment account - an account opened in the name of
one or more payment service users and used for the execution of a
payment;
11) payment order - an instruction by a payer or payee
to its payment service provider requesting the execution of a
payment;
12) value date - a reference time used by a payment
service provider for the calculation of interest on the money
debited from or credited to a payment account;
13) payment institution agent - a natural or legal
person who acts on behalf of a payment institution in providing
payment services (hereinafter also - the agent);
14) payment instrument - any personalised device or set
of procedures agreed between the payment service user and the
payment service provider and used by the payment service user in
order to initiate a payment;
141) issuing of payment instrument - a
payment service provided by a payment service provider upon an
agreement with a payer to ensure a payment instrument thereto for
the initiation and processing of payments of the payer;
15) means of distance communication - a method which,
without the simultaneous physical presence of the payment service
provider and the payment service user, may be used for the
conclusion of a payment services contract;
16) durable medium - any instrument which enables the
payment service user to store information addressed personally to
that payment service user in a way accessible for future
reference for a period of time adequate to the purposes of the
information and which allows the unchanged reproduction of the
information stored;
17) business day - a day within the scope of business
hours of the payment service provider of the payer or the payment
service provider of the payee on which the payment service
provider of the payer or the payment service provider of the
payee performs actions required for the execution of a
payment;
18) direct debit - a payment service as a result of
which money is debited from the payment account of the payer,
where a payment is initiated by the payee on the basis of the
consent given by the payer to the payee, to the payment service
provider of the payee, or to the payment service provider of the
payer;
181) credit transfer - a payment service as
a result of which the payment account of the payee is credited
(from the payment account of the payer) on the basis of a payment
order provided by the payer to the payment service provider which
holds the payment account of the payer;
182) acquiring of payment - a payment
service provided by a payment service provider contracting with a
payee to accept and process payments which results in a transfer
of funds to the payee;
19) holding - the fact that any commercial company
directly or indirectly owns at least 20 per cent of the equity
capital or the number of voting stocks or shares of another
commercial company;
20) group of commercial companies - a group which
consists of a parent company, its subsidiaries, and commercial
companies in which the parent or subsidiary has holding, and
commercial companies which are linked with the parent company,
subsidiary, or company in which the parent company or subsidiary
has holding, by joint management with the company according to
the concluded contract or the provisions of the provisions of the
instruments of incorporation or articles of association of such
commercial companies, or for which at least half of the member of
any administrative institution are the same persons during the
financial year;
21) [24 April 2014];
22) [24 April 2014];
23) qualifying holding - holding directly or indirectly
acquired by a person or several persons who act in a coordinated
manner on the basis of an agreement, which includes 10 and more
per cent of the equity capital or the number of voting stocks or
shares of the commercial company or provides an opportunity to
significantly influence the financial and operational policy of
the commercial company;
24) reference exchange rate - the exchange rate used in
calculation of currency exchange of which the payment service
provider informs the payment service user or which can be
obtained using a publicly available source;
25) authentication - a procedure which allows the
payment service provider to verify the identity of a payment
service user or the validity of the use of a specific payment
instrument, including the use of personalised security
credentials;
251) strong authentication - an
authentication based on the use of two or more elements
categorised as knowledge (something only the payment service user
knows), possession (something only the payment service user
possesses), and inherence (something the payment service user
is). These elements are independent, i.e., one element losing its
reliability does not compromise the reliability of other, and
they are designed in such a way as to protect the confidentiality
of the authentication data;
252) personalised security credentials -
personalised elements provided by the payment service provider to
a payment service user for the purposes of authentication;
253) sensitive payment data - data,
including personalised security credentials which can be used to
carry out fraud. In relation to the activities of payment
initiation service providers and account information service
providers, the given name, surname of the account owner and the
account number do not constitute sensitive payment data;
26) reference interest rate - the interest rate which
is used as the basis for calculating any interest to be applied
in provision of payment services and which can be verified by
both parties to a payment service contract, using a publicly
available source;
27) unique identifier - a combination of letters,
numbers or symbols specified to the payment service user by the
payment service provider and to be provided by the payment
service user to identify unambiguously another payment service
user or the payment account of that other payment service user
for a payment;
28) account statement - a document prepared in printed
or electronic form which is issued by the payment service
provider to the payment service user and in which any movement of
funds in the payment account which has taken place in a specific
period of time and the balance of payment account at the
beginning and end of such period is reflected;
281) digital content - goods or services
which are produced and supplied in digital form, the use or
consumption of which is restricted to a technical device and
which do not include in any way the use or consumption of
physical goods or services;
29) account switching service (hereinafter also - the
account switching) - an activity by which, upon a request of a
consumer (within the meaning of the Consumer Rights Protection
Law; hereinafter - the consumer), one payment service provider
transfers information to another payment service provider either
regarding all or some standing orders in relation to the
execution of credit transfers, periodic direct debit payments,
and period incoming credit transfer which are executed in the
payment account, or transfers any positive balance of the payment
account from one payment account to another, or also executes
both activities, with or without closing the previous payment
account;
30) transferring payment service provider - the payment
service provider which transfers the information required for the
switching of accounts to another payment service provider;
31) receiving payment service provider - the payment
service provider to which the information required for the
switching of accounts is transferred;
32) service fee (hereinafter also - the fee) - any
fees, commissions, and contractual penalties to be paid by the
payment service recipient to the payment service provider for a
payment service or a service related to the payment account;
33) standing order - a payment instruction given by the
payer to the payment service provider which holds the payment
account of the payer to execute credit transfers at regular
intervals or on predetermined dates;
34) overdraft - such service related to the payment
account specified in the contract according to which the payment
service provider grants a possibility to the consumer to use
funds which exceed the current balance of funds in the payment
account of the consumer;
35) overdraft option - a service related to the payment
account which manifests as the possibility offered to the
consumer within the scope of the concluded contract to use funds
which exceed the current balance of funds in the payment account
of the consumer or the agreed overdraft, if the payment service
provider has tacitly agreed thereto;
36) funds (hereinafter - the money) - banknotes and
coins, non-cash and electronic money;
37) innovative service in the field of electronic
payments - a new or significantly improved electronic payment
or electronic money service on the scale of Latvia;
38) own funds - funds as defined in Article 4(1)(118)
of Regulation (EU) No 575/2013 of the European Parliament and of
the Council of 26 June 2013 on prudential requirements for credit
institutions and investment firms and amending Regulation (EU) No
648/2012 (Text with EEA relevance) (hereinafter - Regulation No
575/2013) if it is ensured that at least 75 % of the Tier 1
capital is in the form of Common Equity Tier 1 capital as
referred to in Article 50 of that Regulation and Tier 2 is equal
to or less than one third of Tier 1 capital;
39) initial capital - capital formed by one or several
of the elements referred to in Article 26(1)(a), (b), (c), (d),
and (e) of Regulation No 575/2013;
40) home Member State - a Member State of affiliation,
i.e., a European Union Member State or a state of the European
Economic Area (hereinafter - the Member State) where legal
address or main headquarters of the payment service provider is
located, if the payment service provider does not have legal
address in accordance with the legal acts of its country;
41) participating Member State - a host Member State
which is not the home Member State and in which the payment
service provider has the agent or a branch or in which it
provides payment services;
42) foreign exchange trading - purchasing and selling
of a foreign currency cash in the form of a commercial
activity;
43) foreign exchange company - a capital company
registered in a country of the European Union or European
Economic Area, except for a credit institution which is engaged
in foreign exchange trading and has been registered in accordance
with the procedures specified in Section 26.3 of this
Law.
[17 March 2011; 12 May 2011; 24 April 2014; 2 March 2017;
20 June 2018; 23 September 2021 / Amendment regarding the
supplementation of Section with Clauses 42 and 43 shall come into
force on 1 January 2023. See Paragraph 42 of Transitional
Provisions]
Section 2. (1) This Law prescribes the rights,
obligations, and liability of payment service providers, payment
service users, electronic money issuers, electronic money
holders, foreign exchange companies, and payment systems, the
requirements for the provision of payment services, issuing,
distribution, and redeeming of electronic money, as well as
governs the legal status, operation, and responsibility of
payment institutions, electronic money institutions, foreign
exchange companies, and payment systems.
(2) Payment services may be provided by:
1) a credit institution;
2) an electronic money institution;
3) [26 October 2017 / See Paragraph 26 of Transitional
Provisions];
4) a payment institution;
5) the European Central Bank, Latvijas Banka, or the central
bank of another country when it performs activities other than
monetary policy implementation activities or activities of
another public person;
6) an institution of direct administration or a derived public
person when it performs activities other than activities of a
public person;
7) an institution licensed in a Member State which has
commenced operation in Latvia in accordance with the procedures
laid down in Section 31 of this Law;
8) a savings and loan association.
(21) Electronic money may be issued by:
1) a credit institution;
2) an electronic money institution;
3) [26 October 2017 / See Paragraph 26 of Transitional
Provisions];
4) the European Central Bank, Latvijas Banka, or the central
bank of another country when it performs activities other than
monetary policy implementation activities or activities of
another public person;
5) an institution of direct administration or a derived public
person when it performs activities other than activities of a
public person;
6) an electronic money institution licensed in a Member State
which has commenced operation in Latvia in accordance with the
procedures laid down in Section 31 of this Law;
7) such branch of a foreign electronic money institution which
has received a licence in Latvia.
(22) This Law lays down the measures which ensure
transparency and comparability for a payment service user -
consumer, the principles of switching consumer payment accounts,
and the procedures by which consumers may open and use a payment
account with basic functions (hereinafter - the basic
account).
(3) Chapters VII, VIII, IX, X, XI, XII, XIII, XIV, and
XIV.1 of this Law shall apply to payment service
providers which provide payment services in Latvia, if the
payment service provider of the payer and the payee is located in
a Member State and is providing payment services in euro or
national currency of any Member State.
(31) Chapters VII, VIII, IX, X, XI, XII, Section
97, Chapters XIV and XIV.1 of this Law, except for
Section 64, Clause 2, Sub-clause "e", Section 68, and Section 73,
Paragraph one, Clause 2, shall apply to payment periods executed
in a Member State in any currency, if the payment service
provider of the payer and the payee is located in a Member
State.
(32) Chapters VII, VIII, IX, X, XI, XII, Section
97, Chapters XIV and XIV.1 of this Law, except for
Section 64, Clause 2, Sub-clause "e" and Clause 5, Sub-clause
"g", Section 68 and Section 73, Paragraph one, Clause 2, Section
77, Paragraph two, Sections 79, 88, 89 and Section 94, Paragraph
one, as well as Sections 99 and 101, shall apply to payment
periods executed in a Member State in any currency, if the
payment service provider of the payer and the payee is located in
the Member State.
(4) [12 September 2013]
(5) Sections 58.1, 60.1,
60.2, 60.3 and Section 75.3,
Paragraph four of this Law shall be applied in transaction legal
relationship with the consumer. If the payment service user is
not a consumer, the payment service provider and the payment
service user may agree on non-application of individual
provisions of Chapters VII, VIII, and IX of this Law in their
transaction legal relationship.
(6) The provisions of Section 46.1 of this Law
shall not apply to savings and loan associations.
(7) Sections 46.1, 58.1,
60.1, 60.2, 60.3, Chapters
IX.1 and XIII.1 of this Law shall not apply
to payment service providers which do not offer services related
to a payment account to consumers.
(8) Sections 44.1, 44.3,
46.1, 58.1, 60.1,
60.2, 60.3 and Chapter IX.1 of
this Law shall not apply to such accounts which are opened by a
natural or legal person in a closed system created and maintained
by an electronic money institution and which may be used by the
respective person for the recording of issuing and redeeming of
electronic money, as well as for recording such payments with
electronic money which are executed only in the closed system of
the electronic money institution (hereinafter - the electronic
money account).
[17 March 2011; 12 September 2013; 24 April 2014; 2 March
2017; 26 October 2017; 20 June 2018; 23 September 2021 /
The new wording of Paragraph one shall come into force on 1
January 2023. See Paragraph 42 of Transitional
Provisions]
Section 3. (1) This Law shall not be applied to:
1) payments made exclusively in cash directly from the payer
to the payee, without any intermediary intervention;
2) payments from the payer to the payee through a commercial
agent authorised to negotiate or conclude the sale or purchase of
goods or services on behalf of the payer or the payee;
3) physical transport of banknotes and coins, including their
collection, processing and delivery, if it is done for the
purposes of commercial activities, non-profit-making activities,
or charitable activities;
4) in cases when the payee concurrently with selling of goods
or services is disbursing money to the payer, if the payer has
requested it prior to the settlement of the purchase;
5) money exchange transactions performed by institutions where
the funds are not deposited on a payment account;
6) payments which have been executed on the basis of any of
the following documents referred to in Sub-clause "a", "b", "c",
"d", "e", "f", or "g" of this Clause, drawn on the payment
service provider, with a view to placing money at the disposal of
the payee:
a) paper cheques in accordance with the Geneva Convention of
19 March 1931 providing a uniform law for cheques;
b) paper cheques similar to those referred to in Sub-clause
"a" of this Clause and governed by the laws of Member States
which are not party to the Geneva Convention of 19 March 1931
providing a uniform law for cheques;
c) paper-based drafts in accordance with the Geneva Convention
of 7 June 1930 providing a uniform law for bills of exchange and
promissory notes;
d) paper-based drafts similar to those referred to in
Sub-clause "c" of this Clause and governed by the laws of Member
States which are not party to the Geneva Convention of 7 June
1930 providing a uniform law for bills of exchange and promissory
notes;
e) paper-based vouchers;
f) paper-based traveller's cheques;
g) paper-based postal money orders as defined by the Universal
Postal Union;
7) payments mutually executed within a payment or securities
settlement system between central counterparties, clearing
houses, central banks, settlement agents, other participants of
the system within the meaning of the law On Settlement Finality
in Payment and Financial Instrument Settlement Systems, as well
as payment service providers;
8) payments related to securities asset servicing, redemption,
or sale, including dividends, income or other distributions, if
it is carried out by persons referred to in Clause 7 of this
Section or by investment firms, investment management companies,
or credit institutions which provide investment services, or
other commercial companies allowed to hold financial
instruments;
9) services provided by technical service providers, without
them entering at any time into ownership (possession) of the
money to be transferred, except for payment initiation services
or account information services;
10) to services in which a specific payment instrument is used
in a limited manner for the purchase of goods or a service,
conforming to one of the following conditions:
a) in relation to a very limited, functionally linked range of
goods or services;
b) at the location (in the premises) of the payment instrument
issuer;
c) in a limited and closed network of such sellers of goods
and providers of services which have a commercial contract
concluded directly with the payment instrument issuer;
d) with suppliers in the territory of Latvia which have
commercial agreement with the payment instrument issuer, if the
payment instrument is being issued by a State or local government
institution, or a capital company of a public person for social
purposes in the cases specified in legal acts;
11) payments which are provided by an electronic
communications merchant to an individual end-user (postpaid or
prepaid service user) in addition to communications services,
including payment in the relevant invoice, if the value of
individual payment referred to in Sub-clause "a" or "b" of this
Clause does not exceed EUR 50 and the total value of such
payments for an individual end-user does not exceed EUR 300 per
month and if the payment is executed:
a) for the purchase of digital content or voice telephony
service (including telephone polling, premium rate SMS)
regardless of the device which is used for the purchase or
consumption of digital content;
b) for charity purposes or for the purchase of tickets
(including transport, entertainment, parking or entry permits)
which is executed through an electronic device;
12) mutual payments of payment service providers, as well as
their agents or branches for own needs;
13) to payments executed within the scope of a group of
commercial companies between a parent company and its subsidiary
or between subsidiaries of the same parent company, without
involving other payment service providers outside this group of
commercial companies;
14) withdrawal of money from automated teller machines, if the
service provider is acting as the agent of one or several payment
card issuers, is not party to the framework contract with the
customer withdrawing money from the payment account, and does not
provide other payment services. Before and after withdrawal of
money, the provider of such service shall inform the customer of
the fee which is referred to in Section 58, Paragraph two,
Section 73, Paragraph one, Clauses 3 and 4, Section 74, Clauses 3
and 4, Section 75, Clauses 3 and 4 of this Law and is related to
withdrawal of money.
(2) If the total value of payments executed within the period
of previous 12 months for a person who is carrying out the
activities referred to in Paragraph one, Clause 10 of this
Section exceeds one million euros, it shall send a notification
to Latvijas Banka including therein a description of the services
offered and an explanation as to which of the types of exceptions
referred to in Paragraph one, Clause 10 of this Section would be
applicable to activities of such person.
(3) Latvijas Banka shall, within one month, evaluate the
information submitted in accordance with the procedures laid down
in Paragraph two of this Section and whether the activities of
the person should be recognised as a limited network. Latvijas
Banka shall notify its decision to the person referred to in
Paragraph two of this Section.
(4) A merchant which provides the services indicated in
Paragraph one, Clause 11 of this Section shall notify Latvijas
Banka thereof as well as, henceforth by 31 January of the current
year, submit an expanded report certifying that the activities of
the person conform to the restrictions referred to in Paragraph
one, Clause 11 of this Section.
(5) Latvijas Banka shall send to the European Banking
Authority information regarding the activities notified in
accordance with the procedures laid down in Paragraphs two and
four of this Section.
(6) The description of the activities of such persons who have
notified of their activity in conformity with Paragraphs two and
four of this Section shall be published on the website of
Latvijas Banka.
[17 March 2011; 2 March 2017; 20 June 2018; 23 September
2021 / Amendment to Paragraph one, Clause 5 regarding the
replacement of the words "money exchange transactions" with the
words "money exchange transactions performed by institutions" and
to Paragraph two regarding the replacement of the words "the
Financial and Capital Market Commission" with the words "Latvijas
Banka", amendment regarding the replacement of the word "the
Commission" with the words "Latvijas Banka" shall come into force
on 1 January 2023. See Paragraphs 41 and 42 of
Transitional Provisions]
Chapter II
Licensing and Registration of an Institution
[17 March 2011]
Section 4. (1) An institution may commence its
operation in Latvia only after receipt of the licence of Latvijas
Banka, except for the cases specified in Sections 5 and
5.1 of this Law.
(2) A licensed institution shall pursue the activities
regulated by this Law which are indicated in the licence issued
to the institution.
(21) After registration and in accordance with the
requirements of Sections 5 and 5.1 of this Law, an
institution shall perform the activities governed by this Law
which the institution has indicated when registering in the
register referred to in Section 10, Paragraph three of this
Law.
(3) After an institution has received a licence for the
commencement of operation or after registration in accordance
with the requirements of Sections 5 and 5.1 of this
Law, it shall be regarded as a participant of the financial
market.
(4) A licensed electronic money institution, receiving
authorisation beforehand in accordance with the procedures
specified in Regulation (EU) 2023/1114 of the European Parliament
and of the Council of 31 May 2023 on markets in crypto-assets,
and amending Regulations (EU) No 1093/2010 and (EU) No 1095/2010
and Directives 2013/36/EU and (EU) 2019/1937 (hereinafter -
Regulation No 2023/1114), is entitled to:
1) issue an electronic money token within the meaning of
Article 3(1), point (7) of Regulation No 2023/1114;
2) to provide custody and administration of an electronic
money token issued by it on behalf of clients within the meaning
of Article 3(1), point (17) of Regulation No 2023/1114;
3) to provide transfer services of an electronic money token
issued by it on behalf of clients within the meaning of Article
3(1), point (26) of Regulation No 2023/1114.
[17 March 2011; 24 April 2014; 20 June 2018; 23 September
2021; 13 June 2024]
Section 5. (1) A payment institution does not need a
licence of Latvijas Banka and it is entitled to commence its
operation in Latvia after registration in the register referred
to in Section 10, Paragraph three of this Law if it conforms to
all of the following conditions:
1) the arithmetic mean of the payments executed in the
previous 12 months by the payment institution or its agent for
the activities of which the payment institution assumes
responsibility, or the arithmetic mean of payments of the
subsequent 12 months provided for in the commercial activity plan
does not exceed three million euros per month in the form of the
payment service referred to in Section 1, Clause 1, Sub-clauses
"e" (only issuing of payment instrument) and "f";
2) the restrictions specified in Section 21, Paragraph one of
this Law are not applicable to any of the persons referred to in
Section 11, Paragraph one, Clause 10 of this Law and they conform
to the requirements of Section 20 of this Law;
21) the person who has directly or indirectly
acquired qualifying holding in the institution has impeccable
reputation;
3) all the information and documents referred to in Paragraph
two of this Section have been submitted in accordance with the
requirements of this Law and regulations of Latvijas Banka;
4) the payment service users of the payment institution are
linked to the Republic of Latvia.
(2) In order to register in the register referred to in
Section 10, Paragraph three of this Law, the payment institution
shall submit to Latvijas Banka a registration notification and
the following information:
1) information regarding the person. If a legal person wishes
to provide payment services, its firm name, legal address,
registration number, and place of registration shall be
indicated. If a natural person wishes to provide payment
services, the declared place of residence of such person shall be
indicated, as well as a copy of the passport or another personal
identification document containing the given name, surname, year
and date of birth, and personal identity number shall be
submitted;
2) information regarding the persons referred to in Section
11, Paragraph one, Clause 10 of this Law;
3) the business plan of the payment institution which, inter
alia, also attests to the conformity with the condition referred
to in Paragraph one, Clause 1 of this Section;
4) information as to how the payment institution will ensure
the fulfilment of the requirements of Section 38, Paragraph one
of this Law;
5) the procedures of the institution which ensure the
establishment and efficient operation of the internal control
system for the prevention of money laundering and terrorism and
proliferation financing;
6) information regarding the identity of such persons who have
directly or indirectly acquired qualifying holding in the
institution, as well as regarding the amount of their
holding;
7) information regarding the procedure for ensuring continuity
of commercial activity;
8) other documents to be submitted and indicated in the
regulations of Latvijas Banka.
(3) Latvijas Banka shall, within 30 days after all the
information and documents referred to in Paragraph two of this
Section have been received, evaluate whether the person who
wishes to provide payment services meets the requirements of
Paragraph one of this Section. If the person meets these
requirements, it shall be registered in the register referred to
in Section 10, Paragraph three of this Law.
(4) Latvijas Banka has the right to not register the person in
the register referred to in Section 10, Paragraph three of this
Law if:
1) the person has not proved the conformity of the planned
commercial activity with the condition of Paragraph one, Clause 4
of this Section;
2) the information specified in Paragraph two of this Section
or the additional information requested by Latvijas Banka has not
been submitted;
3) the information submitted by the person does not attest to
sound and prudent management of the institution;
4) persons who have qualifying holding in the institution do
not meet the requirements of Paragraph one, Clause 2.1
of this Section;
5) one or several of the persons referred to in Section 11,
Paragraph one, Clause 10 of this Law do not meet the requirements
of Section 20 of this Law and are subject to the restrictions
indicated in Section 21 of this Law;
6) the documents submitted by the institution contain false
information;
7) the close links of the institution within the meaning of
the Credit Institution Law with the third parties may endanger
its financial stability or restrict the rights of Latvijas Banka
to perform the supervisory functions specified in this Law.
[17 March 2011; 24 April 2014; 20 June 2018; 17 June 2020;
23 September 2021 / Amendment regarding the replacement of
the word "the Commission" with the words "Latvijas Banka" and
amendment regarding the replacement of the words "regulatory
provisions" with the word "regulations" shall come into force on
1 January 2023. See Paragraph 41 of Transitional
Provisions]
Section 5.1 (1) An electronic money
institution does not need a licence of Latvijas Banka and it is
entitled to commence its activity in Latvia after registration in
the register referred to in Section 10, Paragraph three of this
Law if it conforms to all of the following conditions:
1) the average outstanding electronic money within the scope
of commercial activity conducted by the electronic money
institution does not exceed two million euros. If the electronic
money institution additionally performs any of the activities
referred to in Section 36.1, Paragraph one of this Law
and the amount of electronic money is not known, the electronic
money institution shall use the amount of the issued electronic
money for the calculation of the average outstanding electronic
money. The electronic money institution which has not conducted
commercial activity for six full calendar months shall determine
the average outstanding electronic money on the basis of the
business plan, unless Latvijas Banka has requested amendments to
such plan;
2) the restrictions specified in Section 21, Paragraph one of
this Law are not applicable to any of the persons referred to in
Section 11, Paragraph one, Clause 10 of this Law and they conform
to the requirements of Section 20 of this Law;
21) the persons who have directly or indirectly
acquired qualifying holding in the institution have impeccable
reputation;
3) all the information and documents referred to in Paragraph
two of this Section have been submitted in accordance with the
requirements of this Law and regulations of Latvijas Banka;
4) the electronic money institution offers only an established
and maintained closed system for the issuing and redeeming of
electronic money, as well as the electronic money holders and
payment service users thereof, if any, are linked to the Republic
of Latvia.
(2) In order to register in the register referred to in
Section 10, Paragraph three of this Law, the electronic money
institution shall submit to Latvijas Banka a registration
notification and the following information:
1) information regarding its firm name, legal address,
registration number, and place of registration;
2) information regarding the persons referred to in Section
11, Paragraph one, Clause 10 of this Law;
3) the business plan of the electronic money institution
which, inter alia, also attests to the conformity with the
condition referred to in Paragraph one, Clause 1 of this
Section;
4) information as to how the electronic money institution will
ensure fulfilment of the requirements of Section 38, Paragraph
one of this Law;
5) the procedures of the institution which ensure the
establishment and efficient operation of the internal control
system for the prevention of money laundering and terrorism and
proliferation financing;
6) information regarding the identity of such persons who have
directly or indirectly acquired qualifying holding in the
institution, as well as regarding the amount of their
holding;
7) information regarding the procedure for ensuring continuity
of commercial activity;
8) other documents to be submitted and indicated in the
regulations of Latvijas Banka.
(3) Latvijas Banka shall, within 30 days after all the
information and documents referred to in Paragraph two of this
Section have been received, assess whether the person who wishes
to commence the operation of an electronic money institution
meets the requirements of Paragraph one of this Section. If the
person meets these requirements, it shall be registered in the
register referred to in Section 10, Paragraph three of this
Law.
(4) The electronic money institution which is registered in
the register referred to in Section 10, Paragraph three of this
Law is entitled, in addition to the issuing of electronic money,
to provide the services of issuing of a payment instrument and
money remittance if it meets the requirements of Section 5,
Paragraph one of this Law and has submitted the information and
documents referred to in Section 5, Paragraph two of this Law to
Latvijas Banka.
(5) Latvijas Banka has the right to not register the person in
the register referred to in Section 10, Paragraph three of this
Law if:
1) the person has not proved the conformity of the planned
commercial activity with the condition of Paragraph one, Clause 4
of this Section;
2) the information specified in Paragraph two of this Section
or the additional information requested by Latvijas Banka has not
been submitted;
3) the information submitted by the person does not attest to
sound and prudent management of the institution;
4) persons who have qualifying holding in the institution do
not meet the requirements of Paragraph one, Clause 2.1
of this Section;
5) one or several of the persons referred to in Section 11,
Paragraph one, Clause 10 of this Law do not meet the requirements
of Section 20 of this Law and are subject to the restrictions
indicated in Section 21 of this Law;
6) the documents submitted by the institution contain false
information;
7) the close links of the institution within the meaning of
the Credit Institution Law with the third parties may endanger
its financial stability or restrict the rights of Latvijas Banka
to perform the supervisory functions specified in this Law.
[17 March 2011; 12 May 2011; 24 April 2014; 20 June 2018;
17 June 2020; 23 September 2021 / Amendment regarding the
replacement of the word "the Commission" with the words "Latvijas
Banka" and amendment regarding the replacement of the words
"regulatory provisions" with the word "regulations" shall come
into force on 1 January 2023. See Paragraph 41 of
Transitional Provisions]
Section 5.2 (1) If significant amendments
are being made to the information of an institution referred to
in Sections 5 and 5.1 of this Law, including to the
information regarding the persons referred to in Section 11,
Paragraph one, Clause 10 of this Law, as well as the persons who
have directly or indirectly acquired qualifying holding in the
institution, after the institution has already been registered in
the register referred to in Section 10, Paragraph three of this
Law, the relevant institution shall submit updated information to
Latvijas Banka prior to making such amendments.
(2) Before commencing the payment service referred to in
Section 1, Clause 1 of this Law or making significant changes in
the payment service procedures, the institution which is
registered in the register referred to in Section 10, Paragraph
three of this Law shall submit to Latvijas Banka the information
specified in Section 5 of this Law on the planned payment
services.
(3) Latvijas Banka is entitled to request additional
information from the institution in order to evaluate the
conformity of the changes intended by the institution with the
requirements of this Law.
(4) Latvijas Banka has the right, within 30 days from the day
when it has received a notification on changes and the necessary
information, to object against the changes intended by the
institution if:
1) as a result of such changes the institution does not
conform to the requirements of Section 5, Paragraph one or
Section 5.1, Paragraph one of this Law;
2) they may affect the sound and prudent management of the
institution;
3) the institution does not submit or refuses to submit to
Latvijas Banka the information specified in this Law or the
additional information requested by Latvijas Banka.
[17 March 2011; 24 April 2014; 20 June 2018; 23 September
2021 / Amendment regarding the replacement of the word
"the Commission" with the words "Latvijas Banka" shall come into
force on 1 January 2023. See Paragraph 41 of Transitional
Provisions]
Section 5.3 When examining the documents
referred to in Sections 5 and 5.1 of this Law,
Latvijas Banka has the right to request the institution to make
corrections in them or submit additional documents which are
necessary for Latvijas Banka to verify that the institution is
managed soundly and prudently, as well as that the requirements
of this Law are complied with.
[24 April 2014; 23 September 2021 / Amendment
regarding the replacement of the word "the Commission" with the
words "Latvijas Banka" shall come into force on 1 January
2023. See Paragraph 41 of Transitional Provisions]
Section 6. (1) If the payment institution, upon regular
assessment of its operation, establishes that it might not meet
the requirements of Section 5, Paragraph one, Clause 1 of this
Law, it shall inform Latvijas Banka without delay.
(2) If the electronic money institution, upon regular
assessment of its operation, establishes that it might not meet
the requirements of Section 5, Paragraph one, Clause 1 or Section
5.1, Paragraph one, Clause 1 of this Law, it shall
inform Latvijas Banka without delay.
(3) After submission of the notification referred to in
Paragraph one or two of this Section to Latvijas Banka, the
institution shall ensure its conformity with the restrictions
specified in Section 5, Paragraph one, Clause 1 and Section
5.1, Paragraph one, Clause 1 of this Law until it
receives the relevant licence for the operation of a payment
institution or electronic money institution.
[20 June 2018; 23 September 2021 / Amendment
regarding the replacement of the word "the Commission" with the
words "Latvijas Banka" shall come into force on 1 January
2023. See Paragraph 41 of Transitional Provisions]
Section 7. (1) The executive board and legal address
(official seat) of an institution licensed in Latvia shall be
situated in the Republic of Latvia. The place where commercial
activity of the licensed institution is conducted shall be at
least partially linked to the Republic of Latvia.
(2) The management board and legal address (official seat) of
an institution registered in the register referred to in Section
10, Paragraph three of this Law in accordance with the
requirements of Section 5 or 5.1 of this Law shall be situated in
the Republic of Latvia. The place where commercial activity of
such institution is conducted shall only be the territory of the
Republic of Latvia. A registered institution shall not offer and
provide payment services and electronic money services outside
the territory of Latvia or using international payment
systems.
[20 June 2018]
Section 8. (1) The provisions of Section 4, Paragraph
two, Section 9, Section 11, Paragraphs one, two, 2.1,
2.2, 2.3, and three, Section 12, Section
13, Paragraph one, Sections 14, 15, 16, 17, 18, 19, 22, 24, 25,
26, 31, 32, 33, 34, 35, and 37, Section 46, Paragraph three, as
well as Sections 50 and 51 of this Law shall not be binding on
the institutions to which the exemption specified in Sections 5
and 5.1 of this Law is applicable in relation to the
licence.
(2) The requirements of Sections 14, 15, 16, 17, 18, 19, 27,
28, 29, 30, 34, 35 and Chapters VII, VIII, IX, IX.1,
X, XI of this Law, except for the requirements of Sections
80.2 and 82 and Chapters XII, XIII, and
XIII.1, shall not be binding on a payment institution
which has received a licence in accordance with the procedures
laid down in Section 11 of this Law only for the provision of the
account information service. The requirements of Sections 61, 64,
and 73 of this Law shall be binding on the payment institution
referred to in the first sentence of Paragraph two of this
Section to the extent in which they are applicable to the
provision of the account information service.
[24 April 2014; 20 June 2018]
Section 9. A licensed institution has the right to
commence the operation of a payment institution or the operation
of an electronic money institution in another Member State in
accordance with the procedures laid down in Sections 32 and 33 of
this Law.
[17 March 2011; 24 April 2014]
Section 10. (1) Licensed institutions, their agents and
branches, as well as branches of foreign electronic money
institutions which have received a licence in Latvia shall be
registered in the Register of Licensed Institutions maintained by
Latvijas Banka.
(2) The right of an electronic money institution or branch of
a foreign electronic money institution which has received a
licence in Latvia to issue electronic money, as well as the
payment services which the persons referred to in Paragraph one
of this Section are entitled to provide shall be indicated in the
Register of Licensed Institutions.
(3) The institutions for the commencement of the operation of
which a licence is not necessary, their representatives and
branches shall be registered in the Register of Institutions
maintained by Latvijas Banka.
(4) Latvijas Banka shall send to the European Commission
information regarding the number of the institutions referred to
in Paragraph three of this Section, their agents and branches as
regards the situation on 31 December of the calendar year, in
addition indicating the total amount of payments executed thereby
in 12 months of the relevant calendar year and the amount of the
issued electronic money in turnover.
(5) Latvijas Banka shall, without delay, notify the European
Banking Authority of the changes which are made in the registers
referred to in Paragraphs one and three of this Section.
[17 March 2011; 20 June 2018; 23 September 2021 /
Amendment regarding the replacement of the word "the
Commission" with the words "Latvijas Banka" shall come into force
on 1 January 2023. See Paragraph 41 of Transitional
Provisions]
Section 11. (1) In order to receive a licence for the
operation of an institution or for the issuing of electronic
money, an applicant shall submit the relevant application to
Latvijas Banka, appending thereto:
1) the programme of operations of the institution indicating
the types of envisaged payment services. If the electronic money
institution is planning to conduct the issuing of electronic
money, it shall indicate information regarding the planned
issuing of electronic money in the programme of operations;
2) a business plan of the institution for not less than the
first three financial years reflecting in detail the operational
strategy of the institution, financial forecasts, as well as
draft balance, draft profit or loss account, draft calculation of
capital adequacy, market research plans, and other information
which is specified in the regulations issued by Latvijas Banka
and which demonstrates that the applicant will be able to ensure
stable, sound, and prudent operation of the institution;
3) evidence of the existence of the initial capital referred
to in Section 12 of this Law;
4) description of the measures taken for safeguarding the
money of payment service users and electronic money holders in
accordance with the provisions of Section 38 of this Law,
including information regarding the execution of the requirements
of Section 38, Paragraph one of this Law;
5) description of the internal control system and risk
management of the institution which also includes a description
of the administrative, risk management, and accounting procedures
necessary for ensuring adequate and sufficient management of the
institution;
6) the procedures of the institution which ensure the
establishment and efficient operation of the internal control
system for the prevention of money laundering and terrorism and
proliferation financing;
7) description of the structural organisation of the
institution, including information regarding the agents,
branches, outsourcing contracts of the institution and its
participation in a national or international payment system;
8) information regarding the identity of the persons having,
directly or indirectly, qualifying holding in the institution, as
well as regarding the amount of their actual holding and
certification of their conformity with Section 15 of this
Law;
9) list of those persons with whom the institution has close
links within the meaning of the Credit Institution Law;
10) information regarding members of the management board and
council of the institution, the persons who, upon taking
significant decisions on behalf of the institution, cause civil
liabilities for the institution, regarding the persons
responsible for the fulfilment of the requirements for the
prevention of money laundering and terrorism and proliferation
financing, also regarding the persons directly responsible for
the management of the operation of the payment services of the
institution, as well as the documents certifying the conformity
of the respective persons with the requirements of Sections 20
and 21 of this Law;
11) information regarding a sworn auditor or a commercial
company of sworn auditors (hereinafter - the sworn auditor), if
it is necessary in accordance with the Law on the Annual
Financial Statements and Consolidated Financial Statements;
12) the articles of association of the institution, if such
information is not available in the public registers;
13) [20 June 2018];
14) description of the internal control and management system
of the institution in relation to security incident management
and of the examination of complaints submitted by payment service
users and electronic money holders in relation to the security
and monitoring of information systems, including a mechanism
according to which incidents are reported, arising from the
requirements of Section 104.2 of this Law;
15) description of the processes in place to register,
monitor, track, and restrict access to sensitive payment
data;
16) description of the commercial activity continuity measures
of the institution, including effective plans provided for
emergency situations and description of the procedure for the
regular testing and reviewing of the adequacy and efficiency of
such plans;
17) description of the process for the collection of
statistical data on the operation of the institution where data
on the efficiency, provided services, and cases of fraud of the
institution are compiled;
18) description of the information system security policy,
including detailed assessment of the risks associated with the
provided services, as well as description of the security control
and risk mitigation measures.
(2) The audit and organisational measures of the institution
for the protection of the interests of payment service users and
electronic money holders, as well as for ensuring continuity and
credibility, upon executing payment services and issuing
electronic money, shall be indicated in the documents specified
in Paragraph one, Clauses 4, 5, and 7 of this Section.
(21) An applicant who wishes to provide a payment
initiation service or account information service shall, until
the day when the decision to issue a licence is taken, submit to
Latvijas Banka a certified copy of the professional indemnity
insurance or another guarantee.
(22) In order to receive a licence for the
operation of such payment institution which provides only account
information service, the applicant shall submit the relevant
application to Latvijas Banka, appending the information
indicated in Section 11, Paragraph one of this Law thereto,
except for the information indicated in Clauses 3, 4, 6, 8, 9,
11, and 17 of the abovementioned Paragraph.
(3) Upon examining the documents referred to in Paragraph one
of this Section, Latvijas Banka has the right to request the
institution to make corrections in them or submit additional
documents which are necessary for Latvijas Banka to be able to
verify that the institution is managed soundly and prudently, as
well as other requirements of this Law are fulfilled.
(31) The information and documents referred to in
Paragraph one of this Section shall be submitted in the official
language. Individual documents and information may be submitted
in the language upon which the submitter has agreed with Latvijas
Banka.
(4) Latvijas Banka shall determine the procedures by which an
institution operating licence shall be issued, the institution
shall be registered, and the information shall be provided, as
well as the documents to be submitted.
[17 March 2011; 24 April 2014; 19 May 2016; 20 June 2018;
17 June 2020; 23 September 2021; 9 November 2023]
Section 12. (1) A payment institution shall ensure that
on the day when the decision to issue a payment institution
operating licence is taken, its initial capital is at least:
1) EUR 20 000, if the payment institution provides only money
remittance services;
2) EUR 50 000, if the payment institution provides the payment
services referred to in Section 1, Clause 1, Sub-clause "h" of
this Law;
3) EUR 125 000, if the payment institution provides any of the
payment services referred to in Section 1, Clause 1, Sub-clause
"a", "b", "c", "d", or "e" of this Law.
(2) An electronic money institution shall ensure that on the
day when the decision to issue an electronic money institution
operating licence is taken, its initial capital is at least EUR
350 000.
(3) [20 June 2018 / See Paragraph 35 of Transitional
Provisions]
[17 March 2011; 24 April 2014; 20 June 2018]
Section 13. (1) Only the person who meets the criteria
specified in Section 15, Paragraph one of this Law shall be
entitled to acquire qualifying holding in an institution.
(2) Latvijas Banka has the right to request information on the
persons who apply for a qualifying holding (the actual acquirers
of the qualifying holding or persons suspected of having acquired
such a holding), including the owners of legal persons
(beneficial owners) who are natural persons in order to assess
the conformity of such persons with the criteria specified in
Section 15, Paragraph one of this Law.
(3) Latvijas Banka has the right to identify founders
(shareholders and stockholders) and owners (beneficial owners) of
legal persons who apply for a qualifying holding (the actual
acquirers of the qualifying holding or persons suspected of
having acquired such a holding) until the information on the
owners (beneficial owners) who are natural persons is obtained.
In order for Latvijas Banka to be able to identify such persons,
the abovementioned legal persons have the obligation to provide
information to Latvijas Banka requested thereby if such
information is not available in the public registers from which
Latvijas Banka is entitled to receive such information.
(4) If persons (stockholders or shareholders) who are
suspected of the acquisition of qualifying holding in an
institution do not provide or refuse to provide the information
referred to in Paragraph two or three of this Section and their
participation in total comprises 10 or more per cent of the
equity capital or number of voting stocks or shares of the
institution, such persons may not exercise the voting rights of
all the stocks belonging thereto. Latvijas Banka shall, without
delay, inform the relevant stockholders or shareholders and the
institution of this fact.
(5) [2 March 2017]
[17 March 2011; 2 March 2017; 23 September 2021 /
Amendment regarding the replacement of the word "the
Commission" with the words "Latvijas Banka" shall come into force
on 1 January 2023. See Paragraph 41 of Transitional
Provisions]
Section 14. (1) A person who wishes to acquire a
qualifying holding in an institution shall notify Latvijas Banka
thereof in writing in advance. The amount of holding to be
acquired from the equity capital or number of voting stocks or
shares of the institution shall be indicated in the notification
in per cent. The information provided for in the regulatory
enactments of Latvijas Baka which is necessary to assess the
conformity of the person with the criteria specified in Section
15, Paragraph one of this Law shall be appended to the
notification.
(2) If a person wishes to increase its qualifying holding,
thereby reaching or exceeding 20, 33, or 50 per cent of the
equity capital or number of voting stocks or shares of the
institution, or if the institution becomes a subsidiary of such
person, the relevant person shall notify Latvijas Banka thereof
in writing in advance. The amount of the qualifying holding to be
acquired as a percentage of the equity capital or number of
voting stocks or shares of the institution shall be indicated in
the notification and the information provided for in the
regulatory enactments of Latvijas Banka which is necessary in
order to assess the conformity of the person with the criteria
specified in Section 15, Paragraph one of this Law shall be
appended thereto.
(3) Within two business days after the day of receipt of the
notification referred to in Paragraph one or two of this Section
or within two business days after receipt of the additional
information requested thereby, Latvijas Banka shall notify the
person in writing of the receipt of the notification or
additional information and of the final date of the assessment
period.
(4) During the assessment period specified in Section 15,
Paragraph one of this Law, but not later than on the fiftieth
business day of the assessment period, Latvijas Banka has the
right to request additional information on the persons referred
to in this Section in order to evaluate the conformity thereof
with the criteria specified in Section 15, Paragraph one of this
Law.
[17 March 2011; 20 June 2018; 23 September 2021 /
Amendment regarding the replacement of the word "the
Commission" with the words "Latvijas Banka" shall come into force
on 1 January 2023. See Paragraph 41 of Transitional
Provisions]
Section 15. (1) Not later than within 60 business days
from the day when the information referred to in Section 14,
Paragraph three of this Law regarding receipt of the notification
or additional information has been sent to the person, Latvijas
Banka shall assess the free capital adequacy of the person,
taking into account the number of all the shares or stocks of the
institution to be purchased thereby, the financial stability of
such person, and the financial feasibility of the planned
acquisition of the holding in order to ensure stable and diligent
management of such institution in which the relevant person is
planning to acquire holding, as well as the potential influence
of such person on the management and operation of the
institution. Latvijas Banka shall take the following criteria
into account during the assessment process:
1) impeccable reputation of the person and his or her
conformity with the requirements laid down for stockholders or
shareholders of the institution;
2) impeccable reputation and professional experience of such
person who will manage the operation of the institution as a
result of the planned acquisition of holding;
3) financial stability of the person, particularly as to the
way in which the institution in which such person is planning to
acquire holding is conducting economic activity;
4) whether the institution will be able to fulfil the
requirements of this Law and other laws and regulations and
whether the structure of its group of commercial companies in the
composition of which the institution will become included does
not restrict the possibilities of Latvijas Banka to perform the
supervisory functions specified for it in the Law, to ensure
efficient exchange of information among the supervisory
institutions, and to determine the distribution of authorisations
among supervisory institutions;
5) whether there is reasonable suspicion that, in relation to
the planned acquisition of the holding, money laundering and
terrorism and proliferation financing has been carried out or an
attempt to carry out such activities has been made, or that the
planned acquisition of the holding could increase such a
risk.
(2) When requesting the additional information referred to in
Section 14, Paragraph four of this Law, Latvijas Banka has the
right to suspend the assessment period once until the day when
such information is received, but not longer than for 20 business
days. Latvijas Banka has the right to extend the abovementioned
suspension of the assessment period for up to 30 business days if
the person who wishes to acquire, has acquired, wishes to
increase, or has increased its qualifying holding in the
institution is not subject to the supervision of activities of
institutions, investment firms, credit institutions, insurance
companies, reinsurance companies, or investment management
companies, or the declared place of residence or place of
registration of such person is in a foreign country. If, upon
requesting additional information, Latvijas Banka has suspended
the assessment period, the period of suspension shall not be
included in the assessment period.
(3) Within the time period referred to in Paragraph one of
this Section, Latvijas Banka shall take the decision by which the
person is prohibited from acquiring or increasing a qualifying
holding in the institution if:
1) the person does not meet the criteria specified in
Paragraph one of this Section;
2) the person does not submit or refuses to submit to Latvijas
Banka the information specified in this Law or the additional
information requested by Latvijas Banka;
3) due to circumstances beyond the control of the person, he
or she is unable to provide the information specified in this Law
or the additional information requested by Latvijas Banka.
(4) Within two business days after taking the decision
referred to in Paragraph three of this Section and without
exceeding the assessment period specified in Paragraph one of
this Section, Latvijas Banka shall send it to the person who is
prohibited from acquiring or increasing a qualifying holding in
the institution.
(5) If Latvijas Banka fails, within the time period referred
to in Paragraph one of this Section, to send to the person the
decision by which such person is prohibited from acquiring or
increasing a qualifying holding in the institution, it shall be
considered that Latvijas Banka agrees that the relevant person
acquires or increases qualifying holding in the institution.
(6) Provisions of Paragraph three, Clause 3 of this Section
shall not be applicable to a legal person if its stocks are
listed on the regulated market of Latvia or another Member State,
or on such regulated market the operator of which is a lawful
member of the World Federation of Exchanges, and such legal
person shall provide information to Latvijas Banka on its
stockholders which have a qualifying holding therein.
(7) If Latvijas Banka has agreed that a person acquires or
increases a qualifying holding in the institution, such person
shall acquire or increase its qualifying holding therein within
six months from the day when the information referred to in
Section 14, Paragraph three of this Law regarding receipt of
notification or additional information has been sent. If, until
expiry of the relevant time period, the person has failed to
acquire or increase a qualifying holding in the institution, the
consent of Latvijas Banka for acquiring or increasing a
qualifying holding in the institution is no longer effective.
Upon receipt of a reasoned written request of the person,
Latvijas Banka may decide to extend the abovementioned time
period.
(8) When assessing the notifications referred to in Section
14, Paragraphs one and two of this Law, Latvijas Banka shall
consult with the supervisory institutions of the relevant Member
State if the person who has acquired qualifying holding in the
institution is an institution, investment firm, credit
institution, investment management institution, insurance
company, or reinsurance company registered in another Member
State, a parent undertaking of an institution, investment firm,
credit institution, investment management institution, insurance
company, or reinsurance company registered in another Member
State, or a person who controls an institution, investment firm,
credit institution, investment management institution, insurance
company, or reinsurance company registered in another Member
State, and if, upon acquisition or increase of the qualifying
holding by the relevant person, the institution becomes the
subsidiary of such person or falls into control thereof.
(81) Upon assessing the reputation of the persons
referred to in Section 14, Paragraphs one and two of this Law,
Latvijas Banka is entitled to verify identity, criminal record of
such persons and other information which allows to ascertain that
the relevant person has impeccable reputation.
(9) If the influence of the persons who have acquired a
qualifying holding in the institution endangers or may endanger
its financially stable and prudent management and operation that
conforms to laws and regulations, Latvijas Banka shall, without
delay, request termination of such influence and, if necessary,
revocation of the executive board or supervisory board of the
institution, or any member of the executive board or supervisory
board, or prohibit the relevant persons who have acquired
qualifying holding from exercising the voting rights of all the
stocks or shares belonging to them.
(10) Appeal of the administrative act referred to in
Paragraphs three and nine of this Section and issued by Latvijas
Banka shall not suspend its operation.
[17 March 2011; 20 June 2018; 17 June 2020; 23 September
2021 / Amendment regarding the replacement of the word
"the Commission" with the words "Latvijas Banka" shall come into
force on 1 January 2023. See Paragraph 41 of Transitional
Provisions]
Section 16. (1) If a person wishes to terminate a
qualifying holding in an institution, he or she shall provide a
written notification of such decision to Latvijas Banka in
advance. In the notification, the person shall indicate the share
of the fixed capital of the institution or the amount of voting
stocks or shares in percentage from the equity capital or the
number of voting stocks or shares of the institution remaining
thereto.
(2) If a person wishes to decrease its qualifying holding
below 20, 33, or 50 per cent of the equity capital or number of
voting stocks or shares of the institution, or if the institution
is not a subsidiary company of such person anymore, the person
shall notify Latvijas Banka of such decision in writing in
advance.
[17 March 2011; 23 September 2021 / Amendment
regarding the replacement of the word "the Commission" with the
words "Latvijas Banka" shall come into force on 1 January
2023. See Paragraph 41 of Transitional Provisions]
Section 17. Before 31 January of each year, an
institution shall submit to Latvijas Banka a list of the
stockholders or shareholders which had qualifying holding in the
institution as on 31 December of the previous year, appending to
this list information on the stockholders or shareholders and
mutually linked groups of stockholders or shareholders and the
amount of participation in percentage from the equity capital or
number of voting stocks or shares of the institution.
[17 March 2011; 23 September 2021 / Amendment
regarding the replacement of the word "the Commission" with the
words "Latvijas Banka" shall come into force on 1 January
2023. See Paragraph 41 of Transitional Provisions]
Section 18. If a person has not fulfilled the
requirements of Section 14 of this Law, he or she does not have
the right to exercise the voting rights of all stocks or shares
belonging thereto, but the decisions of the meeting of
stockholders or shareholders which have been taken by exercising
the voting rights of such stocks or shares shall be void from the
moment of their taking, and requests to make entries in the
Commercial Register and other public registers may not be made on
the basis of such decisions.
[24 April 2014]
Section 19. (1) Upon determining the amount of holding
indirectly acquired by a person in an institution, the voting
rights acquired by such person (hereinafter - the particular
person) in the institution shall be taken into account:
1) the voting rights which a third party with which the
particular person has entered into an agreement, assigning
coordination of the policy for exercising the voting rights and
action policy in long-term in relation to the management of the
institution as an obligation, is entitled to exercise;
2) the voting rights which a third party is entitled to
exercise according to an agreement which has been entered into
with the particular person and provides for temporary transfer of
the relevant voting rights;
3) the voting rights arising from stocks which the particular
person has received as a security if such person may exercise the
voting rights and has expressed its intention to exercise
them;
4) the voting rights which the particular person is entitled
to exercise for an unlimited time;
5) the voting rights which a commercial company controlled by
the particular person is entitled to exercise or which may be
exercised by such commercial company in accordance with the
provisions of Clauses 1, 2, 3, and 4 of this Paragraph;
6) the voting rights arising from stocks which have been
transferred into holding to the particular person and which may
be exercised thereby at its discretion, if it has not received
special instructions;
7) the voting rights arising from stocks held in the name of a
third party and for the benefit of the particular person;
8) the voting rights which may be implemented by the
particular person as an authorised person if it is entitled to
exercise the voting rights at its discretion and if it has not
received special instructions;
9) the voting rights arising from the stocks acquired by the
particular person in any other indirect way.
(2) The person who wishes to acquire, has acquired, wishes to
increase, or has indirectly increased qualifying holding in the
institution shall, upon request of Latvijas Banka, submit
information thereto which allows to ascertain the conformity of
the relevant person with the requirements of Section 15,
Paragraph one of this Law.
[17 March 2011; 23 September 2021 / Amendment
regarding the replacement of the word "the Commission" with the
words "Latvijas Banka" shall come into force on 1 January
2023. See Paragraph 41 of Transitional Provisions]
Section 20. (1) The following persons may be the
chairperson of the executive board of the institution, a member
of the executive board, the chairperson of the supervisory board
(if such has been established), a member of the supervisory
board, a person who, upon taking significant decisions on behalf
of the institution, causes civil liabilities to the institution,
the person responsible for the fulfilment of the requirements for
the prevention of money laundering and terrorism and
proliferation financing, as well as such person who is directly
responsible for the management of the operation of payment
services of the institution or the issuing of electronic
money:
1) who are competent in financial management issues;
2) who have the necessary education and relevant professional
work experience of three years which has been obtained in a
commercial company, organisation, or institution of corresponding
size;
3) who have impeccable reputation;
4) who have not been deprived of the right to conduct
commercial activity.
(2) The chairperson of the executive board of the institution
and members of the executive board must have higher
education.
(21) If, in addition to the provision of payment
services or issuing of electronic money, the institution conducts
commercial activity of another type which is considered its basic
commercial activity, it shall appoint one or several persons from
amongst the members of the executive board and supervisory board
(if such has been established) of the institution who meet the
requirements of Paragraphs one and two of this Section and are
responsible for the provision of payment services or issuing of
electronic money.
(3) The competent management body of the institution has an
obligation, upon its own initiative or upon request of Latvijas
Banka, to immediately remove the persons referred to in
Paragraphs one and 2.1 of this Section from the office
if they do not conform to the requirements of this Section.
(4) If Latvijas Banka takes the decision to remove the persons
referred to in Paragraphs one and 2.1 of this Section
from the office due to non-conformity to the requirements of this
Section, appeal of the decision of Latvijas Banka shall not
suspend its operation.
[17 March 2011; 19 May 2016; 26 October 2017; 17 June 2020;
23 September 2021 / Amendment regarding the replacement of
the word "the Commission" with the words "Latvijas Banka" shall
come into force on 1 January 2023. See Paragraph 41 of
Transitional Provisions]
Section 21. (1) The following persons may not be the
chairperson of the executive board of the institution, a member
of the executive board, the chairperson of the supervisory board
(if such has been established), a member of the supervisory
board, a person who, upon taking significant decisions on behalf
of the institution, causes civil liabilities to the institution,
the person responsible for the fulfilment of the requirements for
the prevention of money laundering and terrorism and
proliferation financing, as well as the person who is directly
responsible for the management of the operation of payment
services of the institution or the issuing of electronic
money:
1) who have been convicted of committing an intentional
criminal offence or on whom a public prosecutor's penal order has
been imposed for committing an intentional criminal offence;
2) who have been convicted of committing an intentional
criminal offence or on whom a public prosecutor's penal order has
been imposed for committing an intentional criminal offence, even
if he or she has been released from serving the sentence due to
expiration of a limitation period, amnesty, or clemency;
3) the criminal proceedings for committing an intentional
criminal offence initiated against whom have been terminated due
to expiration of a limitation period or amnesty;
4) the criminal proceedings for committing an intentional
criminal offence initiated against whom have been terminated by
releasing from criminal liability if such damage has not been
caused by the offence as to impose a criminal punishment, or if a
settlement with the victim or his or her representative has been
reached;
5) the criminal proceedings for committing an intentional
criminal offence initiated against whom have been terminated if
he or she has provided significant assistance in discovering a
serious or especially serious crime which is more serious or
dangerous than the criminal offence committed by the person
itself;
6) the criminal proceedings for committing an intentional
criminal offence initiated against whom have been terminated by
conditional release from criminal liability.
(2) The competent management body of the institution has an
obligation, upon its own initiative or upon request of Latvijas
Banka, to immediately remove the persons referred to in Paragraph
one of this Section from the office if the restrictions referred
to in Paragraph one of this Section can be applied thereto.
(3) If Latvijas Banka takes the decision to remove the persons
referred to in Paragraph one of this Section from the office due
to non-conformity to the restrictions imposed thereon, the appeal
of the decision of Latvijas Banka shall not suspend its
operation.
[17 March 2011; 19 May 2016; 17 June 2020; 23 September
2021 / Amendment regarding the replacement of the word
"the Commission" with the words "Latvijas Banka" shall come into
force on 1 January 2023. See Paragraph 41 of Transitional
Provisions]
Section 22. Latvijas Banka has the right not to issue
the licence to an institution if:
1) the information specified in Section 11 of this Law or the
additional information requested by Latvijas Banka has not been
submitted;
2) the information submitted by the applicant does not ensure
sound and prudent management of the institution;
3) Latvijas Banka establishes that the financial resources
invested in the equity capital of the institution have been
acquired in unusual or suspicious financial transactions or the
lawfulness of the acquisition of these financial resources has
not been proved by documentary evidence;
4) persons who have qualifying holding in the institution do
not meet the requirements of Section 15, Paragraph one of this
Law;
5) one or several of the persons referred to in Section 11,
Clause 10 of this Law do not meet the requirements of Sections 20
and 21 of this Law;
6) the documents submitted by the institution contain false
information;
7) close links of the institution with third parties may
endanger the financial stability thereof or restrict the right of
Latvijas Banka to perform the supervisory functions specified in
the law;
8) laws and other regulatory enactments of a foreign country
(non-Member State) which apply to the persons who have close
links with the institution restrict the rights of Latvijas Banka
to perform the supervisory functions specified in the law.
[17 March 2011; 23 September 2021 / Amendment
regarding the replacement of the word "the Commission" with the
words "Latvijas Banka" shall come into force on 1 January
2023. See Paragraph 41 of Transitional Provisions]
Section 23. (1) If, in addition to the provision of
payment services, the payment institution is conducting
commercial activity of another type which impairs or is likely to
impair either the financial stability of the payment institution
or the ability of Latvijas Banka to monitor the conformity of the
payment institution with the requirements of this Law, Latvijas
Banka may request establishment of an individual legal person for
the provision of payment services.
(2) If, in addition to the issuing of electronic money and the
provision of payment services, the electronic money institution
is conducting commercial activity of another type which impairs
or is likely to impair either the financial stability of such
institution or the ability of Latvijas Banka to monitor the
conformity of the electronic money institution with the
requirements of this Law, Latvijas Banka may request
establishment of an individual legal person for the issuing of
electronic money or provision of payment services.
[17 March 2011; 23 September 2021 / Amendment
regarding the replacement of the word "the Commission" with the
words "Latvijas Banka" shall come into force on 1 January
2023. See Paragraph 41 of Transitional Provisions]
Section 24. (1) Latvijas Banka shall take the decision
to issue a licence or to refuse to issue a licence and shall
inform the submitter of the application within three months after
receipt of all the necessary documents, notifying the reasons for
refusal in case of refusal.
(2) Latvijas Banka shall issue a licence for the operation of
the institution for an indefinite period of time.
[17 March 2011; 23 September 2021 / Amendment
regarding the replacement of the word "the Commission" with the
words "Latvijas Banka" shall come into force on 1 January
2023. See Paragraph 41 of Transitional Provisions]
Section 25. (1) Latvijas Banka may cancel the licence
of the institution if:
1) the institution has not commenced operation within 12
months from the day of issuing the licence;
2) it is established that the institution has provided false
information for the receipt of the licence or has obtained the
licence by any other illegal means;
3) the institution has ceased operation for a time period
exceeding six months;
4) the institution has commenced liquidation proceedings;
5) the institution is surrendering the licence in the event of
the reorganisation of the institution;
6) insolvency proceedings of the institution have been
declared or the meeting of creditors has taken the decision to
commence bankruptcy procedure;
7) the institution fails to comply with the requirements of
this Law and other laws and regulations governing the operation
of payment services and issuing of electronic money, including
the directly applicable legal acts issued by the European Union
authorities and the regulations of Latvijas Banka in the field of
operation of payment services or issuing of electronic money, or
the continuation of operation thereof would endanger the
stability of the payment system;
8) the institution is requesting cancellation of the licence
issued thereto;
9) a prohibition for exercising the voting rights of the
stocks or shares belonging to the person has set in for the
person who has qualifying holding in the institution, and it
lasts for more than six months;
10) the institution does not conform to the conditions for
granting the licence anymore.
(2) The licence of the institution shall not be renewed if
Latvijas Banka has cancelled it.
(3) Information on the cancelled licence of the institution
shall be published on the website of Latvijas Banka.
(4) If Latvijas Banka takes the decision to cancel the licence
of the institution, the appeal of such decision shall not suspend
its operation.
[17 March 2011; 24 April 2014; 20 June 2018; 23 September
2021 / Amendment regarding the replacement of the word
"the Commission" with the words "Latvijas Banka" and amendment
regarding the replacement of the words "regulatory provisions"
with the word "regulations" shall come into force on 1 January
2023. See Paragraph 41 of Transitional Provisions]
Section 25.1 (1) Latvijas Banka may cancel
an entry in the register referred to in Section 10, Paragraph
three of this Law if:
1) the institution has not commenced operation within 12
months since it has been recorded in the register referred to in
Section 10, Paragraph three of this Law or ceased its operation
for a period of time exceeding six months;
2) it is found that the institution has provided false
information or has obtained an entry in the register referred to
in Section 10, Paragraph three of this Law by any other illegal
means;
3) the institution has commenced liquidation proceedings;
4) insolvency proceedings of the institution have been
declared or the meeting of creditors has taken the decision to
commence bankruptcy procedure;
5) the institution fails to comply with the requirements of
this Law and other laws and regulations governing the operation
of payment services and issuing of electronic money, including
the directly applicable legal acts issued by the European Union
authorities and the regulations of Latvijas Banka in the field of
operation of payment services or issuing of electronic money, or
the continuation of operation thereof would endanger the
stability of the payment system;
6) the institution is requesting to cancel the entry in the
register;
7) the institution does not conform to the conditions for the
registration of an institution provided for in Section 5 or
5.1 of this Law.
(2) If Latvijas Banka takes the decision to cancel an entry in
the register referred to in Section 10, Paragraph three of this
Law, the appeal of such decision shall not suspend its
operation.
[24 April 2014; 20 June 2018; 23 September 2021 /
Amendment regarding the replacement of the word "the
Commission" with the words "Latvijas Banka" and amendment
regarding the replacement of the words "regulatory provisions"
with the word "regulations" shall come into force on 1 January
2023. See Paragraph 41 of Transitional Provisions]
Section 26. (1) If the institution wishes to make
significant changes in the information specified in Section 11 of
this Law and to be submitted to Latvijas Banka, it shall notify
Latvijas Banka thereof in writing and submit the information
referred to in Section 11 of this Law thereto, including also the
intended changes therein.
(2) Latvijas Banka is entitled to request additional
information from the institution in order to assess the
conformity of the changes intended by the institution with the
requirements of this Law.
(3) Latvijas Banka has the right, within 30 days from the day
when it has received a notification on changes and the necessary
information, to object against the changes intended by the
institution if:
1) they may affect the sound and prudent management of the
institution;
2) they do not conform to the requirements of this Law;
3) the institution does not submit or refuses to submit to
Latvijas Banka the information specified in this Law or the
additional information requested by Latvijas Banka.
[17 March 2011; 23 September 2021 / Amendment
regarding the replacement of the word "the Commission" with the
words "Latvijas Banka" shall come into force on 1 January
2023. See Paragraph 41 of Transitional Provisions]
Chapter
II.1
Registration of Retail Payment Systems
[24 April 2014]
Section 26.1 (1) A retail payment system to
which Regulation (EU) No 260/2012 of the European Parliament and
of the Council of 14 March 2012 establishing technical and
business requirements for credit transfers and direct debits in
euro and amending Regulation (EC) No 924/2009 is applicable shall
be registered by Latvijas Banka.
(2) The retail payment system is entitled to commence
operation after registration in the Register of Retail Payment
Systems maintained by Latvijas Banka.
(3) Latvijas Banka shall determine the procedures by which the
retail payment system shall be registered and the information
shall be provided, as well as the documents to be submitted.
[23 September 2021 / Amendment regarding the
replacement of the word "the Commission" with the words "Latvijas
Banka" shall come into force on 1 January 2023. See
Paragraph 41 of Transitional Provisions]
Section 26.2 (1) Latvijas Banka may cancel a
registration entry in the register referred to in Section
26.1, Paragraph two of this Law if:
1) it is established that the operator of the retail payment
system has provided false information or obtained an entry in the
register referred to in Section 26.1, Paragraph two of
this Law by any other illegal means;
2) the operation of the retail payment system fails to comply
with the requirements of this Law and other laws and regulations
governing the operation of retail payment systems, including the
directly applicable legal acts issued by the European Union
authorities and the regulations of Latvijas Banka in the field of
operation of payment services and payment systems, or the
continuation of operation thereof would endanger the stability of
the financial system;
3) the operator of the retail payment system requests
cancellation of the entry from the register.
(2) If Latvijas Banka takes the decision to cancel an entry in
the register referred to in Section 26.1, Paragraph
two of this Law, the appeal of such decision shall not suspend
its operation.
[23 September 2021 / Amendment regarding the
replacement of the word "the Commission" with the words "Latvijas
Banka" and amendment regarding the replacement of the words
"regulatory provisions" with the word "regulations" shall come
into force on 1 January 2023. See Paragraph 41 of
Transitional Provisions]
Chapter
II.2
Registration of Foreign Exchange Companies,
Supervision of Their Operation, and Liability
[23 September 2021 / This
Chapter shall come into force on 1 January 2023. See
Paragraph 42 of Transitional Provisions]
Section 26.3 (1) A foreign exchange company
shall be registered by Latvijas Banka.
(2) A foreign exchange company is entitled to commence
operation after registration in the Register of Foreign Exchange
Companies maintained by Latvijas Banka if it conforms to all of
the following conditions:
1) the capital company has been registered in accordance with
the procedures laid down in the laws and regulations governing
commercial activity;
2) the capital company does not have tax debts;
3) stockholder or shareholder of the capital company (down to
the natural person who is the beneficial owner within the meaning
of the Law on the Prevention of Money Laundering and Terrorism
and Proliferation Financing), chairperson of the supervisory
board (if any has been established), member of the supervisory
board, chairperson of the executive board, member of the
executive board, or procurator meets the conditions of Section
20, Paragraph one, Clause 3 of this Law and is not subject to
that laid down in Section 21, Paragraph one of this Law;
4) the person appointed by the capital company and responsible
for conformity with the requirements of the Law on the Prevention
of Money Laundering and Terrorism and Proliferation Financing in
the capital company meets the requirements of the abovementioned
law;
5) all the information and documents referred to in Paragraph
four of this Section have been submitted in accordance with the
requirements of this Law.
(3) Latvijas Banka shall determine the registration
requirements for foreign exchange companies and the procedures
for registering a foreign exchange company, submitting a
registration notification, documents, and information necessary
for the registration of a foreign exchange company.
(4) In order to register a capital company in the register
referred to in Paragraph two of this Section as a foreign
exchange company, it shall submit to Latvijas Banka the
registration notification and the following documents and
information:
1) information on its firm name, legal address, and
registration number;
2) information on the persons referred to in Paragraph two,
Clause 3 of this Section and their identity and also the
documents certifying the conformity of the respective persons
with the conditions of Section 20, Paragraph one, Clause 3 of
this Law and that the provisions specified in Section 21,
Paragraph one of this Law are not applicable to him or her if
such information is not available in the State information
systems;
3) information on the persons referred to in Paragraph two,
Clause 4 of this Section and also the documents certifying the
conformity of the respective persons with the requirements of the
Law on the Prevention of Money Laundering and Terrorism and
Proliferation Financing;
4) descriptions of such policies and procedures of the capital
company which ensure the establishment and efficient operation of
the internal control system for the prevention of money
laundering and terrorism and proliferation financing and the
internal control system for the sanction risk management within
the meaning of the Law on International Sanctions and National
Sanctions of the Republic of Latvia;
5) the articles of association of the institution if such
information is not available in the public registers;
6) other documents and information specified by Latvijas Banka
in accordance with Paragraph three of this Section.
(5) Within 30 days after receipt of all the information and
documents referred to in Paragraph four of this Section, Latvijas
Banka shall assess whether the capital company meets the
requirements of Paragraph two of this Section. If the capital
company meets the abovementioned requirements, it shall be
registered in the register referred to in Paragraph two of this
Section.
(6) Latvijas Banka is entitled to verify the identity,
criminal record of the persons referred to in Paragraph two,
Clause 3 of this Section and other information which allows to
ascertain that the relevant person meets the conditions of
Section 20, Paragraph one, Clause 3 of this Law and is not
subject to that laid down in Section 21, Paragraph one of this
Law.
(7) Latvijas Banka has the right to not register the capital
company in the register referred to in Paragraph two of this
Section as a foreign exchange company if:
1) the information referred to in Paragraph four of this
Section has not been submitted;
2) one or several of the persons referred to in Paragraph two,
Clause 3 of this Section do not meet the conditions of Section
20, Paragraph one, Clause 3 of this Law and are subject to that
laid down in Section 21, Paragraph one of this Law;
3) one or several of the persons referred to in Paragraph two,
Clause 4 of this Section do not meet the requirements of the Law
on the Prevention of Money Laundering and Terrorism and
Proliferation Financing;
4) foreign exchange trading venue of a capital company does
not meet the requirements determined for the establishment of a
foreign exchange trading venue in accordance with Section
26.5 of this Law;
5) the documents submitted by the capital company contain
false information;
6) the capital company has not paid the fee for the
examination of documents specified in Section 26.4,
Paragraph one of this Law.
[23 September 2021 / Section shall come into force
on 1 January 2023. See Paragraphs 42 and 43 of
Transitional Provisions]
Section 26.4 (1) The capital company who
wishes to be registered in the register referred to in Section
26.3, Paragraph two of this Law as a foreign exchange
company shall pay to Latvijas Banka:
1) for the examination of the documents submitted in
accordance with the procedures laid down in Section
26.3 of this Law for the registration in the Register
of Foreign Exchange Companies - EUR 2500;
2) for the examination of the documents submitted in
accordance with the procedures laid down in Section
26.3 of this Law for the registration in the Register
of Foreign Exchange Companies if the capital company has already
been registered in the Register of Institutions in accordance
with Section 5 or 5.1 of this Law - EUR 500.
(2) After registration in the register referred to in Section
26.3, Paragraph two of this Law, a foreign exchange
company shall pay to Latvijas Banka EUR 2000 per year and
additionally up to 0.2 per cent (including) of the total annual
amount in EUR of the foreign currency purchased and sold but the
total fee paid by the foreign exchange company to Latvijas Banka
shall not exceed EUR 20 000 per year. If a foreign exchange
company is an institution registered in the Register of
Institutions in accordance with Section 5 or 5.1 of
this Law, the total fee to be paid thereby to Latvijas Banka
shall not exceed EUR 100 000 per year.
[23 September 2021 / Section shall come into force
on 1 January 2023. See Paragraph 42 of Transitional
Provisions]
Section 26.5 Latvijas Banka shall determine
the requirements for foreign exchange trading and the procedures
for establishing a foreign exchange trading venue and performing
foreign exchange trading, and also the procedures for performing
inspections in foreign exchange companies.
[23 September 2021 / Section shall come into force
on 1 January 2023. See Paragraph 42 of Transitional
Provisions]
Section 26.6 Information on a foreign
exchange company and its customers, the operation of a foreign
exchange company and its customers which has not been previously
published in accordance with the procedures laid down by law or
the disclosure of which is not determined by other laws, or on
disclosure of which a decision has not been taken by Latvijas
Banka shall be considered restricted access information for the
protection and disclosure of which the provisions of Section 52
of this Law are applicable.
[23 September 2021 / Section shall come into force
on 1 January 2023. See Paragraph 42 of Transitional
Provisions]
Section 26.7 (1) Prior to changing a
stockholder or shareholder (down to the natural person who is the
beneficial owner within the meaning of the Law on the Prevention
of Money Laundering and Terrorism and Proliferation Financing),
chairperson of the supervisory board (if any has been
established), member of the supervisory board, chairperson of the
executive board, member of the executive board, or procurator, a
foreign exchange company shall inform Latvijas Banka thereof for
it to be able to ascertain the conformity of such persons with
the requirements of this Law.
(2) Latvijas Banka shall determine the information and
documents to be submitted in relation to the change of the
persons referred to in Paragraph one of this Section and the
procedures for submitting such information and documents.
(3) Latvijas Banka has the right, within 30 days after the day
it has received information and documents from the foreign
exchange company on the change of the persons referred to in
Paragraph one of this Section, to object against it if:
1) as a result of such changes the foreign exchange company
does not conform to the requirements of Section 26.3,
Paragraph two of this Law;
2) a foreign exchange company does not submit or refuses to
submit the information determined according to Paragraph two of
this Section.
[23 September 2021 / Section shall come into force
on 1 January 2023. See Paragraph 42 of Transitional
Provisions]
Section 26.8 If, during operation of a
foreign exchange company, significant amendments are made to the
documents referred to in Section 26.3, Paragraph four
of this Law or such documents are issued anew, the foreign
exchange company has the obligation to inform Latvijas Banka
thereof by submitting the abovementioned documents within 10 days
after the day the amendments were made to such documents or the
documents were issued anew.
[23 September 2021 / Section shall come into force
on 1 January 2023. See Paragraph 42 of Transitional
Provisions]
Section 26.9 (1) If Latvijas Banka
establishes that the foreign exchange company fails to comply
with the requirements of this Law, the requirements or procedures
for establishing a foreign exchange trading venue or performing
foreign exchange trading, Latvijas Banka is entitled:
1) to apply the following supervisory measures:
a) to request the person who is responsible for foreign
exchange trading to immediately take measures which are necessary
to eliminate the non-conformity of the operation of the foreign
exchange company with the laws and regulations and to submit an
action plan to Latvijas Banka within the time period specified
thereby;
b) to impose restrictions on the operation of a foreign
exchange company, including to partially or completely suspend
the provision of foreign exchange trading services until the
violation of the requirements of a legal act has been
eliminated;
2) impose the following sanctions:
a) to give a warning to the foreign exchange company or the
natural person responsible for the violation;
b) to impose a fine on the foreign exchange company or the
natural person responsible for the violation in the amount of up
to EUR 142 300 for violations of requirements or procedures for
establishing a foreign exchange trading venue or performing
foreign exchange trading;
c) to cancel a registration entry in the register referred to
in Section 26.3, Paragraph two of this Law in
accordance with Section 26.10, Clause 3 or 4 of this
Law.
(2) For the violations of the laws and regulations in the
field of the prevention of money laundering and terrorism and
proliferation financing, Latvijas Banka shall apply the sanctions
specified in the Law on the Prevention of Money Laundering and
Terrorism and Proliferation Financing.
(3) Latvijas Banka shall post the information on the sanctions
and supervisory measures imposed on the person in accordance with
Paragraphs one and two of this Section on its website by
indicating information on the person (for a legal person - name,
for a natural person - given name, surname) and the violation
committed thereby, and also on contesting the administrative act
issued by Latvijas Banka, the ruling adopted, and its appeal.
(4) Latvijas Banka may publish the information referred to in
Paragraph three of this Section without identifying the person if
it is established after an ex-ante assessment that disclosing of
the data of the relevant natural or legal person may endanger the
stability of the financial market or cause incommensurate harm to
the persons involved.
(5) If it is foreseeable that the circumstances referred to in
Paragraph four of this Section may end in a commensurate period
of time, publishing of the information referred to in Paragraph
three of this Section may be postponed for such period of
time.
(6) The information posted on the website of Latvijas Banka in
accordance with the procedures laid down in this Section shall be
available for five years from the day of its posting.
[23 September 2021 / Section shall come into force
on 1 January 2023. See Paragraph 42 of Transitional
Provisions]
Section 26.10 Latvijas Banka may cancel a
registration entry in the register referred to in Section
26.3, Paragraph two of this Law if:
1) a foreign exchange company has not commenced operation
within two months since it has been recorded in the register
referred to in Section 26.3, Paragraph two of this Law
or has ceased its operation for a period of time exceeding six
months;
2) it is established that a foreign exchange company has
provided false information or has obtained an entry in the
register referred to in Section 26.3, Paragraph two of
this Law by any other illegal means;
3) a foreign exchange company fails to comply, in its
operation, with the requirements of this Law and other laws and
regulations governing the operation of a foreign exchange company
or the continuation of operation thereof would endanger the
stability of the financial system;
4) a foreign exchange company has not eliminated, within the
time period determined by Latvijas Banka, the violations due to
which the supervisory measures specified in Section
26.9, Paragraph one, Clause 1 of this Law have been
applied thereto;
5) a foreign exchange company has commenced liquidation
proceedings;
6) insolvency proceedings of a foreign exchange company have
been declared;
7) a foreign exchange company is requesting to cancel the
entry in the register;
8) a foreign exchange company does not conform to the foreign
exchange company registration conditions determined in Section
26.3 of this Law.
[23 September 2021 / Section shall come into force
on 1 January 2023. See Paragraph 42 of Transitional
Provisions]
Section 26.11 If Latvijas Banka establishes
that foreign exchange trading is performed without registration
in accordance with the procedures laid down in this Law, Latvijas
Banka is entitled to give a warning or impose a fine of up to EUR
142 300 on the natural or legal person responsible for the
violation.
[23 September 2021 / Section shall come into force
on 1 January 2023. See Paragraph 42 of Transitional
Provisions]
Section 26.12 (1) The administrative act of
Latvijas Banka which has been issued on the basis of provisions
of Section 26.3, Paragraph seven, Section
26.9, Paragraph one or two, Section 26.10,
and Section 26.11 of this Law may be appealed to the
Regional Administrative Court. The court in the composition of
three judges shall examine the case as the court of first
instance. A judgement of the Regional Administrative Court may be
appealed by submitting a cassation complaint.
(2) If Latvijas Banka, on the basis of the provisions of
Section 26.3, Paragraph seven, Section
26.9, Paragraph one or two, Section 26.10,
and Section 26.11 of this Law, has issued an
administrative act, except for a decision to impose a fine, the
appeal of such act shall not suspend its operation.
[23 September 2021 / Section shall come into force
on 1 January 2023. See Paragraph 42 of Transitional
Provisions]
Chapter III
Use of Agents, Branches or Outsourced Departments
Section 27. (1) The institution may provide payment
services directly or through its agent in accordance with the
procedures laid down in this Section.
(11) In addition to the provisions of Paragraph one
of this Section an electronic money institution may distribute
and redeem electronic money through the agent.
(2) Only such person who has the necessary qualification and
experience in fulfilment of the duties delegated thereto may be
the agent of the institution.
(21) The agent of the institution shall inform
payment service users or electronic money holders that he or she
is offering services on behalf of the institution.
(3) The institution shall inform Latvijas Banka by submitting
a written application that it wishes to provide payment services
or distribute or redeem electronic money through the agent. In
the application, the institution shall indicate the given name,
surname, declared place of residence, and personal identity
number of the agent or information equivalent thereto if the
agent is a natural person. If the agent is a legal person or
merchant, the firm name, legal address, and registration number
of the legal person or merchant shall be indicated.
(4) The institution shall append the following to the
application referred to in Paragraph three of this Section:
1) description of the operational policy of the agent
providing a true and clear view of the procedures for the
provision of such services which will be provided through the
agent;
2) description of the procedure of services to be provided
through the agent of a representative and the original copy or
certified copy of the authorisation agreement entered into with
the agent;
3) description of such internal control mechanism which will
be used by the agent to comply with the requirements of the laws
and regulations for the prevention of money laundering and
terrorism and proliferation financing;
4) information certifying that the restrictions specified in
Section 21 of this Law are not applicable to members of the
management bodies of agents and to the persons responsible for
the activity of the agent.
(5) The following shall be included in the authorisation
agreement:
1) a description of the procedure of services to be provided
through the agent;
2) accurate requirements in relation to the quality of
services which will be provided through the agent;
3) the rights and obligations of the institution and the
agent, including:
a) the right of the institution to continuously supervise the
quality of services, as well as how the agent complies with the
requirements of the laws and regulations for the prevention of
money laundering and terrorism and proliferation financing;
b) the right of the institution to give instructions to the
agent which are mandatory to execute in issues related to honest,
qualitative, timely provision of services conforming to the laws
and regulations;
c) the right of the institution to submit a motivated written
request to the agent to terminate the authorisation agreement
without delay if it has established that the agent does not
fulfil the requirements laid down in the authorisation agreement
in relation to the amount or quality of services;
d) the obligation of the agent to ensure the institution with
the possibility of continuous supervision of the quality of
services, as well as how the agent complies with the requirements
of the laws and regulations for the prevention of money
laundering and terrorism and proliferation financing;
e) the obligation of the agent to terminate the authorisation
agreement without delay upon receipt of a motivated written
request of the institution.
(6) The procedure of services to be provided through the agent
shall govern:
1) the internal procedures by which decisions to delegate the
provision of services shall be taken;
2) the procedures for the conclusion, supervision of
execution, and termination of an authorisation agreement;
3) the rights and obligations of the person and the unit which
are responsible for cooperation with the agent and supervision of
the amount and quality of services which are provided through the
agent, as well as of the relevant person;
4) action of the institution in cases when the agent is not
fulfilling or cannot fulfil the provisions of the authorisation
agreement.
(7) Latvijas Banka has the right to inspect the activity of
the agent at its location or site where services are provided, to
become acquainted with all the documents, accounting and document
registers, to make copies of documents, as well as to request
from the agent information which is related to the provision of
the services delegated thereto or is necessary to Latvijas Banka
for the performance of its functions.
(8) The institution may commence the provision of services
through the agent if Latvijas Banka has not objected against the
provision of services through the relevant agent within 30 days
from the day of submitting the application referred to in
Paragraph four of this Section and the documents appended
thereto.
(9) Latvijas Banka has the right to request additional
information on the procedures by which services will be provided
through the agent for it to be able to evaluate the impact of the
agent on the operation of the institution.
(10) If a licensed institution wishes to provide payment
services or services for the distribution or redeeming of
electronic money through a representative in another Member State
or by opening a branch in another Member State, it shall follow
the procedures laid down in Section 32 of this Law.
(11) The competent management body of the institution has an
obligation, without delay, to terminate the provision of payment
services or distribution of electronic money through the relevant
agent by itself or upon request of Latvijas Banka if the
abovementioned agent does not conform to the requirements of this
Section or does not ensure provision of services corresponding to
the requirements of this Law.
[17 March 2011; 24 April 2014; 20 June 2018; 17 June 2020;
23 September 2021 / Amendment regarding the replacement of
the word "the Commission" with the words "Latvijas Banka" shall
come into force on 1 January 2023. See Paragraph 41 of
Transitional Provisions]
Section 28. (1) Latvijas Banka shall prohibit the
institution from providing payment services or distributing or
redeeming electronic money through the agent if:
1) the requirements of this Law are not conformed to;
2) the documents submitted by the institution contain false
information;
3) the provision of services through the agent endangers or
may endanger the stable operation of the institution, as well as
may infringe the lawful interests of service users of the
institution;
4) the provision of services through the agent may limit the
possibilities of the management bodies of the institution to
fulfil the obligations specified thereto in laws and regulations,
articles of association of the institution, or in other internal
regulatory enactments;
5) the provision of services through the agent will prevent or
restrict the possibilities of Latvijas Banka to perform the
functions specified thereto in the law;
6) the authorisation agreement does not conform to this Law
and does not provide a clear and true view regarding the intended
cooperation of the institution and the agent and the requirements
brought forward to the agent in relation to the amount and
quality of services delegated thereto;
7) it is possible that the provision of services through the
agent does not ensure conformity with the requirements of the
laws and regulations for the prevention of money laundering and
terrorism and proliferation financing.
(2) The fact that the institution is providing services
through the agent shall not release the institution from the
liability specified in this Law or in contracts which it has
concluded with its customers. The institution shall be
responsible for activities of the agent and their result to the
same extent as for its own operations as a whole.
(3) Latvijas Banka has the right to request the institution to
eliminate deficiencies which have occurred, upon its agent acting
on behalf of the institution, and to determine the time periods
for the elimination of such deficiencies. If the deficiencies are
not eliminated by the deadline specified by Latvijas Banka,
Latvijas Banka shall request the institution to terminate the
authorisation agreement and shall determine a deadline for its
termination.
(4) Latvijas Banka is entitled to request the institution to
immediately terminate the authorisation agreement if Latvijas
Banka establishes that:
1) the institution does not supervise the quality of the
services to be provided through the agent or supervises it
irregularly and insufficiently;
2) the institution does not manage the risks related to such
services which are provided through the agent, or manages them
insufficiently and in poor quality;
3) there are significant deficiencies in the activity of the
agent which endanger or may endanger fulfilment of the
liabilities of the institution;
4) any of the circumstances referred to in Paragraph one of
this Section has occurred.
(5) If the institution establishes that the agent does not
meet the requirements laid down in the authorisation agreement in
relation to the amount or quality of services delegated thereto,
it shall, without delay, inform Latvijas Banka thereof.
(6) If the institution makes amendments to the policy and
procedure of services to be provided through the agent, it shall
submit such amendments to Latvijas Banka not later than on the
business day following their approval.
(7) The agent is entitled to further delegate the provision of
payment services or issuing of electronic money to another person
only after he or she has received a written consent of the
institution. Prior to further delegation of the provision of
these services, the institution shall inform Latvijas Banka
thereof in writing and submit the documents referred to in
Section 27 of this Law thereto. The provisions of this Law shall
also be applicable to further delegation of the provision of
services and to the final service provider.
(8) If Latvijas Banka takes a decision on the basis of the
provisions of Paragraphs one, three, and four of this Section,
the appeal of such decision shall not suspend its operation.
[17 March 2011; 20 June 2018; 17 June 2020; 23 September
2021 / Amendment regarding the replacement of the word
"the Commission" with the words "Latvijas Banka" shall come into
force on 1 January 2023. See Paragraph 41 of Transitional
Provisions]
Section 29. (1) Activities (outsourced services) which
are necessary for the provision of the operation of the
institution in the field of the provision of payment services or
issuing of electronic money, i.e., for accounting, for the
management or development of information technologies or systems,
for the fulfilment of the obligations of the internal audit
service, may be delegated to one or several outsourcing service
providers. In addition the institution may delegate the
organisation of the internal control system and provision of some
element of the payment service or electronic money service to one
or several outsourcing service providers in a way that would not
significantly deteriorate the quality of internal control of the
institution.
(11) Latvijas Banka shall determine the
requirements in relation to the use of an outsourced service,
including the requirements to be included in the outsourced
service policy and procedures and in significant outsourced
service contracts, the documents and information to be submitted
to Latvijas Banka for the receipt of significant outsourced
services, the transactions which shall not be considered as
outsourced services, the procedures by which an institution shall
inform of further delegation of outsourced services, and also the
procedures by which an institution shall identify significant
outsourced services and report on amendments thereto.
(2) Only such outsourcing service provider which has the
qualification and experience necessary for the fulfilment of the
obligations delegated thereto is entitled to provide outsourced
services to the institution.
(3) The obligations of the internal audit service of a
licensed institution may be delegated only to a sworn auditor or
the parent company of the institution - an institution registered
in the Member State.
(4) Prior to receiving a significant outsourced service, an
institution shall submit to Latvijas Banka a substantiated
written submission for the planned receipt of an outsourced
service. The submission shall be accompanied by the documents
provided for in the regulations of Latvijas Banka and the
information which is necessary to assess the conformity of the
outsourced service to be received with the requirements of this
Law.
(5) [9 November 2023]
(6) [9 November 2023]
(7) Latvijas Banka has the right to inspect the activity of
the outsourcing service provider at its location or site where
outsourced services are provided, to become acquainted with all
the documents, accounting and document registers, to make copies
of documents, as well as to request information from the
outsourcing service provider which is related to the provision of
the outsourced service or is necessary for Latvijas Banka to
perform its functions.
(8) The outsourcing service provider shall commence the
provision of the outsourced service to the institution if
Latvijas Banka has not objected against the receipt of the
outsourced service within 30 days from the day of submission of
the application referred to in Paragraph four of this
Section.
[17 March 2011; 24 April 2014; 26 October 2017; 20 June
2018; 23 September 2021; 9 November 2023]
Section 30. (1) Latvijas Banka shall prohibit the
institution to receive the planned outsourced service if:
1) the provisions of this Law are not conformed to;
2) receipt of the outsourced service may limit the
possibilities of the institution to provide payment services or
electronic money services, as well as infringe the lawful
interests of service users of the institution;
3) receipt of the outsourced service may limit the
possibilities of the management bodies of the institution to
fulfil the obligations specified thereto in laws and regulations,
in the articles of association of the institution, or in other
internal regulatory enactments;
4) the receipt of the outsourced service will preclude or
restrict the possibility of Latvijas Banka to perform the
functions specified thereto in the law;
5) the outsourcing contract does not conform to this Law and
does not provide a clear and true view of the intended
cooperation of the institution and the outsourcing service
provider and the requirements for the amount and quality of the
outsourced service.
(2) The fact that the institution is receiving an outsourced
service shall not release it from the liability specified in this
Law or in contracts concluded by the institution with its
customers. The institution shall be responsible for the
activities of the outsourcing service provider and their result
to the same extent as for its own operations as a whole.
(3) Latvijas Banka has the right to request the institution to
eliminate the deficiencies which have occurred upon receipt of
the outsourced service and to determine deadlines for the
elimination of such deficiencies. If the deficiencies are not
eliminated by the deadline specified by Latvijas Banka, Latvijas
Banka shall request the institution to terminate the outsourcing
contract and shall determine a deadline for its termination.
(4) Latvijas Banka is entitled to request the institution to
immediately terminate the outsourcing contract if Latvijas Banka
establishes that:
1) the institution does not supervise the quality of the
outsourced service or supervises it irregularly and
insufficiently;
2) the institution does not manage the risks associated with
the provision of the outsourced service or manages them
insufficiently and in poor quality;
3) there are significant deficiencies in the activities of the
outsourcing service provider which endanger or may endanger the
fulfilment of the liabilities of the institution;
4) any of the circumstances referred to in Paragraph one of
this Section has occurred.
(5) If the institution establishes that the outsourcing
service provider fails to comply with the requirements laid down
in the outsourcing contract for the amount or quality of the
outsourced service, it shall, without delay, inform Latvijas
Banka thereof.
(6) If the institution makes amendments to the policy and
procedure for providing the outsourced service, it shall submit
such amendments to Latvijas Banka not later than on the following
business day after their approval.
(7) The outsourcing service provider is entitled to further
delegate the provision of the outsourced service to another
person only after he or she has received a written consent of the
institution. Prior to further delegation of the provision of the
outsourced service, the institution shall inform Latvijas Banka
thereof in writing and submit the documents referred to in
Section 29 of this Law thereto. The provisions of this Law shall
also be applicable to further delegation of the provision of the
outsourced service and to the final provider of the outsourced
service.
(8) If Latvijas Banka takes a decision on the basis of the
provisions of Paragraphs one, three, and four of this Section,
the appeal of such decision shall not suspend its operation.
[17 March 2011; 20 June 2018; 23 September 2021 /
Amendment regarding the replacement of the word "the
Commission" with the words "Latvijas Banka" shall come into force
on 1 January 2023. See Paragraph 41 of Transitional
Provisions]
Section 31. (1) An institution licensed in another
Member State may open a branch or engage an agent in Latvia,
without the licence specified in this Law, only after:
1) Latvijas Banka has received a notification of the
supervisory authority of institutions of the relevant home Member
State which conforms to the requirements of Commission Delegated
Regulation (EU) 2017/2055 of 23 June 2017 supplementing Directive
(EU) 2015/2366 of the European Parliament and of the Council with
regard to regulatory technical standards for the cooperation and
exchange of information between competent authorities relating to
the exercise of the right of establishment and the freedom to
provide services of payment institutions (Text with EEA
relevance) (hereinafter - Regulation No 2017/2055) and the
documents appended thereto;
2) within 30 days, Latvijas Banka has assessed the
notification submitted in accordance with Clause 1 of this
Paragraph and the documents appended thereto and has informed the
supervisory authority of institutions of the relevant home Member
State of its assessment;
3) Latvijas Banka has received a notification from the home
Member State of the date of commencing the operation of the
branch or agent of the institution or the date from which the
branch or agent is registered in the relevant Register of
Institutions of the home Member State.
(2) An institution licensed in another Member State shall
commence the operation of a payment institution or electronic
money institution in Latvia, without opening a branch after:
1) Latvijas Banka has received the notification of the
supervisory authority of institutions of the relevant home Member
State which conforms to the requirements of Regulation No
2017/2055;
2) Latvijas Banka has, within 30 days, assessed the
notification submitted in accordance with Clause 1 of this
Paragraph and has informed the supervisory authority of
institutions of the relevant home Member State of its
assessment;
3) Latvijas Banka has received a notification from the home
Member State of the date from which the institution is planning
to commence operation in Latvia.
[20 June 2019; 23 September 2021 / Amendment
regarding the replacement of the word "the Commission" with the
words "Latvijas Banka" shall come into force on 1 January
2023. See Paragraph 41 of Transitional Provisions]
Section 32. (1) An institution licensed in Latvia shall
open a branch or use the agent in another Member State in
accordance with the procedures laid down in this Section and in
Regulation No 2017/2055.
(2) The institution shall inform Latvijas Banka in writing
that it wishes to open a branch or use the agent in another
Member State. In the application it shall indicate the Member
State in which it intends to provide the services, and also the
information regarding the types of services of the operation of
the payment institution or electronic money institution which the
institution is planning to provide in the relevant Member
State.
(3) If the institution is planning to use the agent, then the
following shall be appended to the application referred to in
Paragraph two of this Section:
1) the name, registration number or the given name, surname,
and personal identity number, if such has been assigned, of the
agent;
2) the address of the agent;
3) description of the internal control system which will be
used by the agent to follow the requirements of the laws and
regulations for the prevention of money laundering and terrorism
and proliferation financing;
4) documents certifying that the restrictions specified in
Section 21 of this Law do not apply to the members of the
management bodies of the agent of the institution and to persons
who are responsible for the provision of the payment service or
for the distribution or redeeming of electronic money if the
agent is not already a licensed provider of payment services or
electronic money institution.
(4) If the institution is planning to open a branch, then a
description of the organisational structure of the branch, the
given name, surname, personal identity number, if such has been
assigned, of the head of the branch, as well as the information
specified in Section 11, Paragraph one, Clauses 2 and 5 of this
Law shall be appended to the application referred to in Paragraph
two of this Section.
(5) If the institution is planning to receive an outsourced
service in the participating Member State for the provision of
payment services or for the distribution or redeeming of
electronic money, it shall inform Latvijas Banka thereof
accordingly.
(6) After receipt of all the necessary documents prepared in
accordance with the requirements of the laws and regulations,
Latvijas Banka shall, within 30 days, forward the application for
the opening of a branch or use of the agent in another Member
State to the supervisory authority of institutions of the
participating Member State.
(7) Latvijas Banka shall, within three months after it has
received an application for the opening of a branch or use of the
agent in another Member State, take the decision to register the
branch or agent of the institution in the Register of
Institutions referred to in Section 10 of this Law or to refuse
to register the branch or agent of the institution and shall
notify the relevant institution and the supervisory authority of
institutions of the participating Member State of its decision,
if necessary, indicating an appropriate justification. When
taking the decision, Latvijas Banka shall also take into account
the assessment provided by the competent authorities of the
participating Member State.
(8) After receipt of the decision of Latvijas Banka, the
institution shall notify Latvijas Banka of the date from which it
shall commence its operation through a branch or the agent in the
respective participating Member State. After receipt of the
notification, Latvijas Banka shall inform the supervisory
authority of institutions of the participating Member State
thereof.
(9) The institution shall, not later than 30 days before
making amendments to the information referred to in Paragraphs
two, three, four, and five of this Section, including regarding
additional agents, branches, or outsourcing service providers,
notify Latvijas Banka thereof in writing. Latvijas Banka shall
forward the information received regarding amendments to the
supervisory authority of institutions of the participating Member
State in accordance with Paragraph six of this Section and shall
take a relevant decision within the time period and in accordance
with the procedures laid down in Paragraph seven of this
Section.
(10) Irrespective of the number of branches established in
another Member State, they shall be considered as one branch in
the respective Member State.
[20 June 2018; 17 June 2020; 23 September 2021 /
Amendment regarding the replacement of the word "the
Commission" with the words "Latvijas Banka" shall come into force
on 1 January 2023. See Paragraph 41 of Transitional
Provisions]
Section 33. (1) An institution licensed in Latvia shall
commence the provision of payment services or issuing of
electronic money in another Member State, without opening a
branch therein and without the use of the agent, in accordance
with the procedures laid down in this Section and in Regulation
No 2017/2055.
(2) The institution shall inform Latvijas Banka in writing, by
submitting an application, that it wishes to commence the
provision of payment services or issuing of electronic money in
another Member State, without opening a branch therein and
without the use of the agent. In the application, the institution
shall indicate the Member State in which the provision of payment
services or issuing of electronic money is intended, and the
types of payment services planned to be provided thereby.
(3) Latvijas Banka shall examine the application for the
provision of payment services or issuing of electronic money in
another Member State, without opening a branch therein and
without the use of the agent, within 30 days after receipt of all
the necessary documents which have been prepared in accordance
with the requirements of the laws and regulations, and shall
forward it to the supervisory authority of institutions of the
participating Member State.
(31) Latvijas Banka shall, within three months
after receipt of the application referred to in Paragraph two of
this Section, decide to allow or prohibit the institution to
provide payment services or issue electronic money in the
participating Member State, without opening a branch therein and
without the use of the agent, and shall notify the relevant
institution and the supervisory authority of institutions of the
participating Member State of its decision, if necessary,
indicating an appropriate justification. When taking the
decision, Latvijas Banka shall also take into account the
assessment provided by the competent authorities of the
participating Member State, if such has been provided.
(4) The institution may commence operation in another Member
State, without opening a branch therein and without the use of
the agent, if it has received the notification of Latvijas Banka
referred to in Paragraph 3.1 of this Section regarding
its decision.
(5) The payment institution which has received a licence for
the provision of the account information service in accordance
with the procedures laid down in this Law has the right to
commence the provision of the payment service in another Member
State in accordance with the procedures laid down in Sections 32
and 33 of this Law.
[17 March 2011; 20 June 2018; 23 September 2021 /
Amendment regarding the replacement of the word "the
Commission" with the words "Latvijas Banka" shall come into force
on 1 January 2023. See Paragraph 41 of Transitional
Provisions]
Chapter IV
Requirements Governing the Operation of the Institution
[17 March 2011]
Section 34. (1) The own funds of the institution may
not fall below the highest of the following values - the minimum
initial capital or the capital requirement which has been
calculated in accordance with the provisions of Section 35 of
this Law.
(2) [20 June 2018 / See Paragraph 35 of Transitional
Provisions]
(3) Latvijas Banka may allow the institution which is a
subsidiary of a credit institution registered in Latvia and is
subject to the requirements of consolidated supervision to
derogate from the requirements of Section 35 of this Law if all
of the following conditions to ensure corresponding allocation of
own funds between the parent company and the subsidiary have been
met:
1) there is no current or foreseen practical or legal
impediment for the parent company to make prompt transfer of own
funds to the subsidiary or to settle the liabilities of the
subsidiary;
2) the parent company ensures proper management of the
subsidiary and guarantees fulfilment of the liabilities of the
subsidiary, or the risks of the subsidiary are insignificant at
the level of the consolidation group;
3) the risk assessment, measurement and control procedures of
the parent company also apply to the subsidiary;
4) the parent company has more than 50 per cent of the voting
stock of the subsidiary, or the parent company has the right to
appoint or remove the majority of the members of the management
body of the subsidiary.
[17 March 2011; 24 April 2014; 20 June 2018; 23 September
2021 / Amendment regarding the replacement of the word
"the Commission" with the words "Latvijas Banka" shall come into
force on 1 January 2023. See Paragraph 41 of Transitional
Provisions]
Section 34.1 An institution which is
registered in the register referred to in Section 10, Paragraph
three of this Law, as well as a licensed payment institution
which provides only the account information service shall ensure
that, in accordance with the Law on the Annual Financial
Statements and Consolidated Financial Statements, the total sum
of the items of the balance sheet section "Own Funds" is not
negative.
[20 June 2018]
Section 35. (1) The payment institution, except for an
institution which provides only the payment services referred to
in Section 1, Clause 1, Sub-clause "h" or "i" of this Law, shall
ensure that its own funds are always higher than or equal to the
own funds requirement.
(2) Latvijas Banka shall issue regulations laying down the
procedures for calculating the own funds requirements of the
payment institution.
(3) Based on the risk management process of the institution,
data on the current and potential risk of losses, and the
internal control system, Latvijas Banka is entitled to impose an
obligation on the institution to maintain a level of own funds
that is up to 20 per cent higher than the own funds requirement
which has been calculated according to the regulations of
Latvijas Banka.
(4) If the electronic money institution provides payment
services, it shall meet the own funds requirement calculated in
accordance with the conditions of Paragraphs one and two of this
Section for the provision of such services.
(5) If the electronic money institution only performs issuing
of electronic money, such institution shall ensure that its own
funds are always higher than or equal to two per cent from the
average outstanding electronic money.
(6) The electronic money institution which in addition to the
issuing of electronic money also provides payment services shall
ensure that its own funds are always higher than or equal to the
own funds requirement which is formed by the sum of amounts of
own funds calculated in accordance with the conditions of
Paragraphs two and five of this Section.
(7) If the electronic money institution performs payment
services or any of the activities referred to in Section
36.1, Paragraph one of this Law and the average
outstanding electronic money is not known in advance, the
forecast of the average outstanding electronic money which is
determined on the basis of the data of previous periods of the
issuing of electronic money shall be used for the calculation of
the own funds requirement. The electronic money institution which
has not conducted commercial activity for six full calendar
months shall determine the average outstanding electronic money
on the basis of the business plan, unless Latvijas Banka has
requested to make amendments to such plan.
[20 June 2019; 23 September 2021 / Amendment
regarding the replacement of the word "the Commission" with the
words "Latvijas Banka" and amendment regarding the replacement of
the words "regulatory provisions" with the word "regulations"
shall come into force on 1 January 2023. See Paragraph 41
of Transitional Provisions]
Section 35.1 (1) The institution which
provides the payment initiation service shall insure the civil
liability of its professional activity which arises if, due to
the professional activity or negligence of the institution, an
unauthorised payment is executed, a payment is not executed, is
executed by mistake or with delay, causing losses to the payer,
payment service user, or payment service provider. A professional
indemnity insurance contract shall be in effect in the territory
where the institution is providing or is planning to provide the
payment initiation service.
(2) The institution which provides the account information
service shall insure the civil liability of its professional
activity which arises from unauthorised or unlawful access to the
payment account information or from unauthorised or unlawful use
of the payment account information. The professional indemnity
insurance contract shall be in effect in the territory where the
institution is providing or is planning to provide the account
information service.
(3) The institution is entitled to choose another guarantee
issued by a credit institution which is considered equivalent to
the professional indemnity insurance referred to in Paragraphs
one and two of this Section in relation to the liability referred
to in Paragraphs one and two of this Section. The requirements of
Paragraphs four, five, and six of this Section shall be
applicable to the guarantee issued by the credit institution.
(4) The institution shall ensure that the civil liability of
its professional activity is insured at any time in sufficient
amount, in conformity with the requirements of the minimum limit
of professional indemnity insurance.
(5) The professional indemnity insurance contract concluded
with the provider of the payment initiation service shall provide
that the insurer compensates the losses which are causally
related to an unauthorised, non-executed, defective or delayed
payment within the insurance period, if the payment service
provider which services the account has submitted the claim for
the compensation of losses against the provider of the payment
initiation service within 18 months after the end of the
insurance period.
(6) The institution shall notify Latvijas Banka of an early
termination of the professional indemnity insurance contract at
least 10 days before the early termination of the abovementioned
insurance contract.
(7) Latvijas Banka shall issue regulations regarding the
amount of the minimum limit of the professional indemnity
insurance and the procedures for its calculation.
[20 June 2018; 23 September 2021 / Amendment
regarding the replacement of the word "the Commission" with the
words "Latvijas Banka" and amendment regarding the replacement of
the words "regulatory provisions" with the word "regulations"
shall come into force on 1 January 2023. See Paragraph 41
of Transitional Provisions]
Section 36. (1) In addition to the provision of payment
services, the payment institution may perform:
1) an activity which is related to the provision of payment
services;
2) an activity of payment systems;
3) a commercial activity of another type in accordance with
the requirements of the laws and regulations.
(2) The payment institution shall ensure that the money which
has been received from payment service users or for the execution
of payments of another payment service provider are held in
payment accounts which may only be used for payment services.
Section 36.1 (1) In addition to the issuing
of electronic money, the electronic money institution may:
1) provide payment services;
2) ensure services related to the issuing of electronic money
or provision of payment services;
3) ensure the operation of payment systems;
4) conduct commercial activity of another type in accordance
with the requirements of the laws and regulations.
(2) The electronic money institution shall ensure that the
funds which have been received from payment service users or for
the execution of payments of another payment service provider are
held in payment accounts which may only be used for payment
services.
[17 March 2011]
Section 36.2 The electronic money
institution shall, without delay, exchange the money which it
receives from an electronic money holder for electronic
money.
[17 March 2011]
Section 37. A licensed institution may grant a credit
linked to payment services if the following conditions are
met:
1) the credit is granted only for the provision of the payment
services referred to in Section 1, Clause 1, Sub-clauses "d" and
"e" of this Law;
2) the credit must be repaid within not longer than 12 months
from the day of its issuance;
3) the credit is not granted from the financial resources
which have been received or are held for the execution of
payments, or have been received in exchange for electronic
money;
4) the total amount of credits granted by the institution at
any time is commensurable with the amount of own funds which has
been determined in accordance with Section 34 of this Law.
[17 March 2011; 24 April 2014; 20 June 2018]
Section 38. (1) The institution shall ensure that the
money which has been received from payment service users or for
the execution of payments of another payment service provider is
secured with a guarantee insurance policy or another guarantee
issued by an insurer or such credit institution which is not in
any group of commercial companies together with the institution,
or also shall ensure that this money:
1) is separated from the money of such other persons which are
not payment service users on whose behalf the money is held. The
payment institution shall transfer the money which it has not
transferred to the account of the payee or sent to another
payment service provider at the end of the business day following
its receipt to an individual account in the bank or shall invest
in safe, liquid, low-risk assets which are considered such in
accordance with the regulations of Latvijas Banka;
2) is kept separately from the money of such other persons
which are not the payment service users on whose behalf the money
is held, as well as ensure that the money is not included in the
property of the institution from which claims of other creditors
of such institution are covered.
(2) The requirements of Paragraph one of this Section shall
also apply to the money which has been received by the
institution for the execution of future payments. If the amount
of such money is not known, the institution shall apply the
requirements of Paragraph one of this Section, taking into
account the previous data on such transactions in the period of a
year of operation of the institution. The institution which has
not conducted commercial activity for a full year of operation
shall apply the requirements of Paragraph one of this Section,
taking into account the business plan.
(3) If the institution has concluded a contract for the
receipt of the guarantee insurance policy or another guarantee
referred to in Paragraph one of this Section, it shall inform
Latvijas Banka of the provisions of such contract.
(4) The institution has an obligation to create an internal
control system which ensures continuous control of conformity
with the requirements laid down in Paragraphs one and five of
this Section.
(5) The electronic money institution shall ensure the
fulfilment of the requirements laid down in Paragraphs one, two,
and three of this Section in relation to the money which has been
received in exchange for the electronic money issued, within the
time period specified in Section 94, Paragraph one of this
Law.
(6) The requirements referred to in Paragraph five of this
Section shall not be applicable to the money which has been
received by the electronic money institution in the form of a
payment executed using a payment instrument, until the moment
when the relevant money has not been transferred to the payment
account of the electronic money institution or has otherwise come
at the disposal of the electronic money institution for the
execution of the payment at the time of executing the payment
specified in this Law, but not later than five business days
after issuing of electronic money.
[17 March 2011; 12 May 2011; 24 April 2014; 20 June 2018;
23 September 2021 / Amendment regarding the replacement of
the word "the Commission" with the words "Latvijas Banka" and
amendment regarding the replacement of the words "regulatory
provisions" with the word "regulations" shall come into force on
1 January 2023. See Paragraph 41 of Transitional
Provisions]
Section 38.1 (1) The funds which have been
received by the institution for making the payments from payment
service users or another payment service provider, as well as
from electronic money holders are not included in the property of
the institution from which other claims of creditors or third
parties are satisfied and expenses of insolvency proceedings or
liquidation are covered. Only justified claims of payment service
users, other payment service providers, and electronic money
holders may be satisfied from the abovementioned funds.
(2) After declaration of insolvency proceedings or after the
decision of Latvijas Banka on the cancellation of the licence of
the institution or on the cancellation of the entry in the
register referred to in Section 10, Paragraph three of this Law,
the funds referred to in Paragraph one of this Section are
disbursed, without delay, to payment service users or another
payment service provider from which they have been received for
execution of payments, as well as to electronic money holders
according to justified requests.
[20 June 2019; 23 September 2021 / Amendment
regarding the replacement of the word "the Commission" with the
words "Latvijas Banka" shall come into force on 1 January
2023. See Paragraph 41 of Transitional Provisions]
Section 39. The institution shall store the
documentation which is related to the licensing of the
institution, the use of agents, branches, and outsourced
departments, the governing requirements laid down for the
institution and its supervision for not less than five years.
[17 March 2011]
Section 39.1 A person who wishes to provide
payment services or electronic money services shall pay to
Latvijas Banka:
1) for the examination of the documents submitted for the
registration in the Register of Institutions and in accordance
with the procedures laid down in Section 5 or 5.1 of
this Law - EUR 2500;
2) for the examination of the documents submitted for the
receipt of a licence of a payment institution or electronic money
institution and in accordance with the procedures laid down in
Section 11 of this Law - EUR 5000;
3) for the examination of the documents submitted for the
receipt of a licence of a payment institution or electronic money
institution and in accordance with the procedures laid down in
Section 11 of this Law if the person is already registered in the
Register of Institutions - EUR 4000;
4) for the examination of the documents submitted for the
registration in the Register of Institutions and in accordance
with the procedures laid down in Section 5 or 5.1 of
this Law or for the examination of the documents submitted for
the receipt of a licence of a payment institution or electronic
money institution and in accordance with the procedures laid down
in Section 11 of this Law if the person is planning to offer an
innovative service in the field of electronic payments - EUR
450;
5) for the examination of the documents submitted for the
registration in the Register of Institutions and in accordance
with the procedures laid down in Section 5 or 5.1 of
this Law if the institution is already registered in the Register
of Foreign Exchange Companies in accordance with the procedures
laid down in Section 26.3 of this Law - EUR 1500.
[2 March 2017; 23 September 2021 / Clause 5 shall
come into force on 1 January 2023. Amendment regarding the
replacement of the word "the Commission" with the words "Latvijas
Banka" shall come into force on 1 January 2023. See
Paragraphs 41 and 42 of Transitional Provisions]
Section 40. (1) The payment institution which has
received a licence of Latvijas Banka shall pay to Latvijas Banka
EUR 7000 per year and additionally up to 1.4 per cent (inclusive)
of its gross revenue annually which are related to the provision
of payment services, however, the total payment of the
institution to Latvijas Banka shall not exceed EUR 100 000 per
year.
(11) The electronic money institution which has
received a licence of Latvijas Banka shall pay to Latvijas Banka
EUR 7000 per year and additionally up to 1.4 per cent (inclusive)
of its gross revenue annually which are related to the provision
of services of the electronic money institution, however, the
total payment of the institution to Latvijas Banka shall not
exceed EUR 100 000 per year.
(12) [2 March 2017]
(13) If the institution is only offering an
innovative service in the field of electronic payments, it shall
pay to Latvijas Banka EUR 1000 per year for the subsequent three
years from the day when a licence for the operation of the
institution has been received.
(14) The institution which has received a licence
of Latvijas Banka only for the provision of the account
information service or the provision of the payment initiation
service, or for the provision of both such services, shall pay to
Latvijas Banka EUR 3000 per year and additionally up to 1.4 per
cent (inclusive) of its gross revenue annually which are related
to the provision of payment services, however, the total payment
of the institution to Latvijas Banka shall not exceed EUR 100 000
per year.
(15) A payment institution or electronic money
institution licensed in another Member State which has commenced
operation in Latvia in accordance with the procedures laid down
in Section 31, Paragraph one of this Law shall pay up to EUR 7000
to Latvijas Banka per year by making the payments by 30 January
of the following year.
(2) [1 January 2023 / See Paragraph 44 of Transitional
Provisions]
(3) [23 September 2021 / See Paragraph 41 of Transitional
Provisions]
[17 March 2011; 12 September 2013; 24 April 2014; 2 March
2017; 20 June 2018; 23 September 2021 / Amendment to
Paragraphs one, 1.1, 1.3, and
1.4 regarding the replacement of the words "for
financing the operation of the Commission" with the words "to
Latvijas Banka", amendment regarding the replacement of the word
"the Commission" with the words "Latvijas Banka", and also
amendment regarding the deletion of Paragraphs two and three
shall come into force on 1 January 2023. See Paragraphs 41
and 44 of Transitional Provisions]
Section 40.1 (1) The payment institution
which does not need a licence to commence the operation in
accordance with the provisions of Section 5 of this Law shall,
after registration in the register referred to in Section 10,
Paragraph three of this Law, pay to Latvijas Banka EUR 1000 per
year and additionally up to 1.4 per cent (inclusive) of its gross
revenue annually which are related to the provision of payment
services, however, the total payment of the institution to
Latvijas Banka shall not exceed EUR 100 000 per year.
(2)The electronic money institution which does not need a
licence to commence its operation in accordance with the
provisions of Section 5.1 of this Law shall, after
registration in the register referred to in Section 10, Paragraph
three of this Law, pay to Latvijas Banka:
1) EUR 1000 per year and additionally up to 1.4 per cent
(inclusive) of its gross revenue annually which are related to
the provision of services of the electronic money institution,
however, the total payment of the institution to Latvijas Banka
shall not exceed EUR 100 000 per year;
2) [20 June 2018].
(3) [2 March 2017]
(31) If the institution is only offering an
innovative service in the field of electronic payments, it shall
pay to Latvijas Banka EUR 1000 per year for the subsequent three
years from the day when the institution has been registered in
the Register of Institutions referred to in Section 10, Paragraph
three of this Law.
(4) [23 September 2021 / See Paragraph 41 of Transitional
Provisions]
(5) A retail payment system which is being registered in the
register referred to in Section 26.1, Paragraph two of
this Law shall pay EUR 1000 to Latvijas Banka per year by making
the payments by 30 January of the following year.
(6) [23 September 2021 / See Paragraph 41 of Transitional
Provisions]
[24 April 2014; 2 March 2017; 20 June 2018; 23 September
2021 / Amendment to Paragraphs one, two, 3.1,
and five regarding the replacement of the words "for financing
the operation of the Commission" with the words "Latvijas Banka",
and also amendment regarding the deletion of Paragraphs four and
six shall come into force on 1 January 2023. See Paragraph
41 of Transitional Provisions]
Chapter V
Relationship of the Payment Service Provider and the Payment
Service User
[17 March 2011; 20 June
2013]
Section 41. The relationship of a payment service
provider and a payment service user shall be governed by this
Law, other laws and regulations governing the operation of the
field of payment services, the directly applicable legal acts of
the European Union in the field of payment services and
electronic money, as well as civil contracts which have been
entered into by and between the payment service provider and the
payment service user.
[20 June 2013]
Section 42. The institution has an obligation, within a
year after expiry of the term of operation of the contract
mutually concluded between the institution and the payment
service user, to refund the unused money upon a request of the
payment service user, without requesting payment for that. The
provision referred to in the first sentence of this Section shall
be included in the contract between the institution and the
payment service user.
[17 March 2011]
Section 43. (1) The institution has an obligation to
guarantee secrecy of the person, accounts, and transactions of
the payment service user.
(2) Information regarding payment accounts of and transactions
made by natural persons shall be provided to the natural persons
themselves and their legal representatives.
(3) Information regarding payment accounts of and transactions
make by legal persons shall be provided to the authorised
representatives and senior bodies of such legal persons upon a
request of the heads of such institutions.
(4) Information regarding the payment service user, his or her
payment accounts and transactions made according to a written
contract shall be provided to a third party if the service user
has unequivocally agreed thereto in the contract concluded with
the institution.
(5) Information regarding the payment service user and his or
her transactions which is obtained by the institution upon
provision of payment services according to the concluded
contracts is non-disclosable information that does not contain an
official secret.
[17 March 2011]
Section 44. (1) Everyone who has intentionally or
unintentionally made public or disclosed information regarding
customer accounts of the institution or the payment services
provided to customers to persons who do not have the right to
receive the relevant information, if such information has been
entrusted or become known to him or her as a stockholder or
shareholder of the institution, a member of the supervisory board
(if such has been established) or executive board, or an employee
of the institution, shall be held criminally liable in accordance
with the procedures laid down in the law.
(2) Persons who have committed the violation referred to in
Paragraph one of this Section shall also be punished in such case
if the violation was committed after the abovementioned persons
had terminated contractual relationship or fulfilment of
obligations, or employment relationship in the institution.
[17 March 2011]
Section 44.1 (1) Information regarding the
customer, its payment account and individual safe-deposit box in
use shall be provided to the State Revenue Service as the manager
of the account register in accordance with the amount and the
procedures laid down in the Account Register Law. The payment
service provider specified in Section 2, Paragraph two, Clauses
2, 4, 7, and 8 of this Law has an obligation to provide such
information regarding the following persons and their payment
accounts and individual safe-deposit boxes in use:
1) regarding a natural person - resident of the Republic of
Latvia;
2) regarding a natural person - non-resident;
3) regarding a legal person - resident of the Republic of
Latvia and the permanent representative office of a non-resident
in Latvia;
4) regarding a legal person - non-resident of the Republic of
Latvia.
(11) The payment service providers specified in
Section 2, Paragraph two, Clauses 2, 3, 4, 7, and 8 of this Law
have an obligation to provide the State Revenue Service
information regarding suspicious transactions, within the meaning
of the Law on Taxes and Duties and in accordance with the
procedures and within the amount laid down in the aforementioned
Law, of persons whose country of residence (registration) is the
Republic of Latvia.
(2) The payment service provider specified in Section 2,
Paragraph two, Clause 1 of this Law - a credit institution -
shall provide information to the State Revenue Service as the
manager of the account register in accordance with the provisions
of the Credit Institution Law and in accordance with the
procedures and within the amount laid down in the Account
Register Law.
(3) The payment service providers specified in Section 2,
Paragraph two, Clauses 2, 3, 4, 7, and 8 of this Law have an
obligation to provide the State Revenue Service information
regarding customers - natural persons who are residents of the
Republic of Latvia - and the amount of the total annual debit or
credit turnover of the previous year of whose payment accounts
(including closed payment accounts) within the scope of one
payment service provider reaches or exceeds the amount specified
in the Law on Taxes and Duties. The abovementioned information
shall be provided within the amount and the time period specified
in the Law on Taxes and Duties and in accordance with the
procedures laid down in the laws and regulations issued on the
basis of the Law on Taxes and Duties.
[12 May 2011; 24 April 2014; 30 November 2015; 23 November
2016; 20 June 2018; 17 June 2020]
Section 44.2 (1) The payment service
provider shall not commence a business relationship with such
gambling operator or its intermediary which is indicated in the
decision of the Lotteries and Gambling Supervisory Inspection,
sent to the payment service provider, on the prohibition to
commence and continue business relationship with a gambling
operator which conducts activity without the licence specified in
the laws and regulations of the Republic of Latvia or its
intermediary (hereinafter - the unlicensed gambling operator). If
the payment service provider has commenced a business
relationship with the unlicensed gambling operator, it shall
terminate such business relationship after receipt of the
decision.
(2) The payment service provider is prohibited from making
credit transfers to an account of the unlicensed gambling
operator indicated in the decision referred to in Paragraph one
of this Section. The payment service provider shall fulfil this
obligation without delay, but not later than within three
business days from the day of receipt of the decision.
(3) The payment service provider shall not be responsible for
losses which have occurred upon executing that specified in the
decision of the Lotteries and Gambling Supervisory
Inspection.
(4) In addition to the restrictions on making payments, if
such have been imposed on a payer, the payment service provider
shall refuse the making of remote payments, using the payment
card issued to the resident of the Republic of Latvia, for the
payment service recipient - an organiser of gambling and
interactive lotteries unlicensed in the Republic of Latvia. The
abovementioned remote payment shall be identified according to
the identifiers specified for providers of gambling and lottery
services which have been assigned in the international payment
card schemes.
(5) The Lotteries and Gambling Supervisory Inspection shall
provide payment service providers with the current information
regarding merchants which are organisers of gambling and
interactive lotteries licensed in the Republic of Latvia. The
information shall be published on the website of the Lotteries
and Gambling Supervisory Inspection.
(6) The payment service provider shall, each year by 1
February, submit information to the State Revenue Service
regarding remote payments which were refused in the previous
calendar year in accordance with Paragraph four of this Section,
indicating the given name, surname, personal identity number of
the payer, as well as the payment date and the data identifying
the payee at the disposal of the payment service provider. One
report may include information regarding several payers.
[24 April 2014; 3 April 2019; 23 September 2021]
Section 44.3 (1) The State Revenue Service
shall notify for enforcement the following orders which are
mandatorily enforceable in accordance with the procedures laid
down in this Section to the payment service provider specified in
Section 2, Paragraph two, Clauses 2, 3, 4, 7, and 8 of this Law
(hereinafter - the subject of this Section):
1) an order on the partial or complete suspension of the
settlement operations of the taxpayer;
2) an order on the attachment of funds;
3) an order on the transfer of funds;
4) an order regarding the enforceable activity or adjustment
of the amount of funds determined with the order referred to in
Clauses 1, 2, and 3 of this Paragraph, or regarding cancellation
of a previously notified order.
(2) Bailiffs shall notify for enforcement the following orders
which are mandatorily enforceable in accordance with the
procedures laid down in this Section to the subject of this
Section:
1) an order on the attachment of funds;
2) an order on the transfer of funds;
3) an order regarding the enforceable activity or adjustment
of the amount of monetary funds laid down by the order provided
for in Clauses 1 and 2 of this Paragraph, or regarding
cancellation of a previously notified order.
(3) The subject of this Section shall accept for enforcement
the order specified in Paragraphs one and two of this Section and
provide the notification on the enforcement of the order
(hereinafter - the data exchange) in one of the following ways of
data exchange:
1) electronically through the State information system
integrator managed by the State Regional Development Agency;
2) [1 July 2019; see Paragraph 19 of Transitional
Provisions];
3) [1 July 2019; see Paragraph 19 of Transitional
Provisions].
(4) The payment service provider specified in Section 2,
Paragraph two, Clause 1 of this Law shall perform the data
exchange with the State Revenue Service and bailiffs in
accordance with the procedures laid down in the Credit
Institution Law.
(5) The subject of this Section has an obligation to accept
the order specified in Paragraphs one and two of this Section
which has been notified during the previous business day for
execution not later than until the end of the current business
day (23:59). The subject of this Section shall, without delay,
suspend the settlement operations after acceptance of the order
specified in Paragraph one, Clause 1 of this Section for
enforcement in the amount indicated in the order. The subject of
this Section shall, without delay, attach the funds in accounts
of the person after acceptance of the order specified in
Paragraph one, Clause 2 and Paragraph two, Clause 1 of this
Section for enforcement in the amount indicated in the order or,
if there are not enough funds, - as soon as they are received in
accounts of the person until reaching the sum indicated in the
order.
(6) The subject of this Section which, using the type of data
exchange specified in Paragraph three, Clauses 1 and 2 of this
Section, has accepted the order specified in Paragraph one,
Clause 2 and Paragraph two, Clause 1 of this Section for
execution shall, within three business days after acceptance of
the relevant order for execution, notify the giver of the order
of the execution of the order, sending a notification on the
execution. The identification data of the person (regarding a
natural person - the given name, surname, and personal identity
number or date of birth; regarding a legal person - the name and
registration number), the number of the executed order, and the
amount of the attached sum shall be indicated in the notification
on the enforcement.
(7) The subject of this Law has an obligation to, without
delay after acceptance of the order specified in Paragraph one,
Clause 3 and Paragraph two, Clause 2 of this Section for
enforcement, transfer the funds to the giver of the order to the
account indicated in the order. The funds shall be transferred in
such amount which is not smaller than that indicated in the
notification on the enforcement of the order, except when a
reduced amount of funds to be transferred is indicated in the
order on the transfer of funds. If, after the funds have been
transferred in the amount specified in this Paragraph, the order
specified in Paragraph one, Clause 3 and Paragraph two, Clause 2
of this Section has not been enforced completely, the subject of
this Section shall attach the funds as soon as they are received
in accounts of the person and, without delay, transfer them to
the account indicated in the order.
(8) Until complete enforcement of the orders specified in
Paragraphs one and two of this Section or their revocation the
subject of the Law shall not provide payment services to the
customer (its authorised person) and shall not carry out other
tasks which are related to the transfer of the funds in accounts
of the person or issuing them from the account of the person,
except for the transfer of funds specified in this Section.
(9) Upon receipt of several orders the subject of this Section
shall accept them for enforcement and enforce them in such order
as they were notified. An order which has been sent, using the
type of data exchange specified in Paragraph three, Clause 1 of
this Section, shall be considered notified at the moment when it
has been posted in the State information system integrator
managed by the State Regional Development Agency and shall be
accepted for enforcement in the order of the assigned unique
numbers. The order specified in Paragraph one, Clause 4 and
Paragraph two, Clause 3 of this Section shall be accepted for
enforcement in the order of the assigned unique numbers and
enforced in such order as was specified for the enforcement of
the initial order (order to be replaced).
(10) The Cabinet shall determine the procedures by which the
subject of this Section, upon enforcing the order specified in
Paragraphs one and two of this Section, shall commence and
perform data exchange, using the type of data exchange specified
in Paragraph three, Clause 1 of this Section.
[23 November 2016 / The second sentence of Paragraph
ten (in relation to delegation to the Cabinet to determine the
procedures by which the subject of this Section, upon enforcing
the order specified in Paragraph one of this Section, shall
commence and perform data exchange, using the type of data
exchange specified in Paragraph three, Clause 2 of this Section)
is repealed from 1 July 2019. See Paragraphs 18, 19, and
20 of Transitional Provisions]
Chapter VI
Supervision of Operations and Responsibility of Payment Service
Providers, Electronic Money Institutions and Payment Systems
[24 April 2014]
Section 45. (1) Latvijas Banka has the right to
additionally specify other requirements governing the operation
of institutions in order to reduce the risk of operation of
institutions and to protect electronic money holders and payment
service users.
(2) Latvijas Banka shall publish information on its website
regarding a website created by the Consumer Rights Protection
Centre in which consumers can compare the fee stipulated by
payment service providers for the services related to the payment
account.
[17 March 2011; 24 April 2014; 2 March 2017; 23 September
2021 / Amendment regarding the replacement of the word
"the Commission" with the words "Latvijas Banka" shall come into
force on 1 January 2023. See Paragraph 41 of Transitional
Provisions]
Section 46. (1) The payment institution which is a
commercial company shall, in the annual statement and in the
consolidated annual statement, reflect information regarding
payment services which are referred to in Section 1, Clause 1 of
this Law and regarding other activities performed thereby in
accordance with Section 36, Paragraph one of this Law in items of
the annual statement and in the consolidated annual
statement.
(11) The electronic money institution shall, in the
annual statement and in the consolidated annual statement,
reflect information regarding the activities related to the
provision of electronic money services and another activities
performed thereby in accordance with Section 36.1,
Paragraph one, Clauses 2, 3, and 4 of this Law in individual
items of the annual statement and the consolidated annual
statement.
(12) In addition to the provisions of Paragraph
1.1 of this Section, the electronic money institution
which is providing payment services shall, in the annual
statement and in the consolidated annual statement, reflect
information regarding the activities performed thereby in
accordance with Section 36.1, Paragraph one, Clause 1
of this Law in individual items of the annual statement and the
consolidated annual statement.
(2) The payment institution which is a commercial company and
an electronic money institution performing payment services shall
present the sum total of payments made in the reporting year in
annex to the annual statement and the consolidated annual
statement. The reporting year of the institution shall coincide
with the calendar year.
(21) The electronic money institution shall, in
annex to the annual statement and the consolidated annual
statement, indicate the outstanding electronic money as on 31
December of the reporting year and the amount of electronic money
redeemed in the reporting year. The reporting year of the
electronic money institution shall coincide with the calendar
year.
(3) The payment institution which is a natural person shall,
by 1 April of the current calendar year, submit information to
Latvijas Banka on the sum total of payments made in the previous
calendar year.
[17 March 2011; 24 April 2014; 20 June 2018; 23 September
2021 / Amendment regarding the replacement of the word
"the Commission" with the words "Latvijas Banka" shall come into
force on 1 January 2023. See Paragraph 41 of Transitional
Provisions]
Section 46.1 (1) The payment service
provider which is providing services linked to a payment account
shall, once a year, submit the current information to the
Consumer Rights Protection Centre regarding the fee for services
referred to in Section 60.1, Paragraph two of this
Law. If changes have been made in the information previously
provided by the payment service provider, the payment service
provider shall notify the Consumer Rights Protection Centre
thereof within the time period provided for in the provisions
referred to in Paragraph two of this Section.
(2) The Cabinet shall determine the amount and content of the
information to be provided to the Consumer Rights Protection
Centre in accordance with Paragraph one of this Section, and also
the procedures and time periods for its submission, and the form
of its submission.
[2 March 2017 / See Paragraph 23 of Transitional
Provisions]
Section 47. The institution shall be obliged to inform
Latvijas Banka of any circumstances which may have a significant
influence on further operation of the institution.
[17 March 2011; 23 September 2021 / Amendment
regarding the replacement of the word "the Commission" with the
words "Latvijas Banka" shall come into force on 1 January
2023. See Paragraph 41 of Transitional Provisions]
Section 48. (1) For the performance of the supervisory
functions, Latvijas Banka is entitled to request the institution
to prepare reports on its operations in accordance with the
regulations issued by Latvijas Banka regarding the procedures for
the preparation and submission of such reports.
(2) Latvijas Banka shall issue the regulations determining the
requirements for the establishment and operation of the internal
control system of the institution in order to ensure risk
management of the operation of the institution and to protect the
lawful interests of payment service users and electronic money
holders.
(3) Latvijas Banka has the right to stipulate requirements
governing the operation of institutions and the payment system
which arise from the decisions, guidelines, and recommendations
adopted by the European Banking Authority in the field of payment
services and electronic money, taking into account the nature of
cross-border activities of the European financial supervision
system in order to ensure uniform and efficient practice of
supervision in Member States.
[17 March 2011; 20 June 2013; 24 April 2014; 20 June 2018;
23 September 2021 / Amendment regarding the replacement of
the word "the Commission" with the words "Latvijas Banka" and
amendment regarding the replacement of the words "regulatory
provisions" with the word "regulations" shall come into force on
1 January 2023. See Paragraph 41 of Transitional
Provisions]
Section 49. (1) In order to inspect the conformity of
the operations of institutions and payment systems with the
requirements of this Law as well as with the requirements of the
directly applicable legal acts of the European Union, Latvijas
Banka has the right:
1) to request the institution or body, or person who is
responsible for the operation of the payment system to provide
the information necessary for supervision;
2) to perform inspections in the institution or body, or
person who is responsible for the operation of the payment system
and the inspect the operation of the respective system.
(2) In order to inspect the conformity of the operation of
branches opened by institutions licensed in another Member State
and agents used which have commenced their operation in Latvia in
accordance with the procedures laid down in Section 31, Paragraph
one of this Law with the requirements of Chapters V, VII, VIII,
IX, X, XI, XII, XIII, XIV, XIV.1, and XV of this Law,
Latvijas Banka has the right:
1) to request the branch, agent or central contact point of
agents to provide the information necessary for supervision;
2) to perform inspections in the branch or location of the
agent.
[24 April 2014; 20 June 2018; 23 September 2021 /
Amendment regarding the replacement of the word "the
Commission" with the words "Latvijas Banka" shall come into force
on 1 January 2023. See Paragraph 41 of Transitional
Provisions]
Section 49.1 (1) A branch of the institution
licensed in another Member State or an agent which has commenced
its operation in Latvia in accordance with the procedures laid
down in Section 31, Paragraph one of this Law shall, at least
once a year, provide a report to Latvijas Banka on the payment
services provided, and a branch or agent of the electronic money
institution shall provide information on the electronic money
issued, distributed, and redeemed.
(2) The procedures for the submission of the report referred
to in Paragraph one of this Section and its content shall be
determined by the directly applicable legal acts of the European
Union regarding supervisory authorities of institutions of the
participating Member States.
(3) Latvijas Banka has the right, in conformity with the
requirements of the directly applicable legal acts of the
European Union regarding the criteria for the determination of a
central contact point, to request an institution licensed in
another Member State which has commenced the provision of payment
services in Latvia in accordance with the procedures laid down in
Section 31, Paragraph one of this Law through agents to determine
a central contact point to ensure the conformity of the operation
with the requirements referred to in Section 49, Paragraph two of
this Law.
[20 June 2019; 23 September 2021 / Amendment
regarding the replacement of the word "the Commission" with the
words "Latvijas Banka" shall come into force on 1 January
2023. See Paragraph 41 of Transitional Provisions]
Section 50. (1) The supervisory authority of
institutions of another Member State has the right to perform
inspections in branches of institutions of the relevant Member
State registered in Latvia and at agents of institutions, or to
authorise Latvijas Banka for such purpose.
(2) Prior to commencing an inspection, the supervisory
authority of institutions of another Member State shall, in a
timely manner, inform Latvijas Banka thereof in writing. A
representative of Latvijas Banka has the right to participate in
the inspection. The supervisory authority of institutions of
another Member State shall submit a copy of the report on results
of the performed inspection to Latvijas Banka.
[17 March 2011; 20 June 2018; 23 September 2021 /
Amendment regarding the replacement of the word "the
Commission" with the words "Latvijas Banka" shall come into force
on 1 January 2023. See Paragraph 41 of Transitional
Provisions]
Section 50.1 (1) Latvijas Banka shall be
responsible for cooperation with the supervisory authorities of
Member States and the European Banking Authority in order to
ensure immediate exchange of information regarding the operation
of payment service providers licensed and registered in
Latvia.
(2) Upon a motivated request, Latvijas Banka shall provide
information to the supervisory authorities of Member States and
the European Banking Authority on the payment service providers
licensed and registered in Latvia which are providing the
services referred to in this Law if such information is necessary
for the fulfilment of the obligations of supervisory authorities.
Latvijas Banka has the right to indicate that the abovementioned
information may be disclosed to the third parties which require
it for the fulfilment of the functions specified in the law only
upon a written consent of Latvijas Banka.
(3) Latvijas Banka has the right to refuse cooperation to the
supervisory authority of another Member State in performance of
inspections or other supervisory activities or in exchange of the
information specified in Paragraph two of this Section if:
1) such inspection on site, another supervisory activity, or
exchange of information may have an adverse effect on the State
sovereignty, safety, or public order of Latvia;
2) court proceedings have already been initiated in Latvia for
the same violation and against the same persons;
3) a court judgment has already entered into effect on the
same violation and in relation to the same persons.
(4) Latvijas Banka shall inform accordingly the supervisory
authority of the Member State which submitted the request for
cooperation of the refusal and its reasons.
[2 March 2017; 23 September 2021 / Amendment
regarding the replacement of the word "the Commission" with the
words "Latvijas Banka" shall come into force on 1 January
2023. See Paragraph 41 of Transitional Provisions]
Section 51. (1) If Latvijas Banka establishes that a
branch of an institution licensed in another Member State or an
agent which is operating in Latvia, or an institution licensed in
another Member State which is providing financial services
without opening a branch or without using an agent therein
performs activities which are in contradiction with the laws and
regulations, it shall, without delay, request the relevant branch
or agent, or institution to terminate such activities.
(2) If a branch of an institution licensed in another Member
State or an agent which is operating in Latvia, or an institution
licensed in another Member State which is providing financial
services without opening a branch or without using an agent
therein does not terminate activities which are in contradiction
with the laws and regulations, Latvijas Banka shall, without
delay, inform the supervisory authority of institutions of the
relevant Member State whose obligation is to act in order to
eliminate the violations. The supervisory authority of
institutions of another Member State shall inform Latvijas Banka
of the measures taken.
(21) If Latvijas Banka has received information
from the supervisory authority of institutions of another Member
State that a branch of an institution licensed in Latvia or an
agent which is operating in another Member State, or a licensed
institution which is providing financial services in another
Member State without opening a branch or without using an agent
therein performs activities which are in contradiction with the
laws and regulations, Latvijas Banka shall, immediately after
assessing the information, take all the required measures to
ensure that the relevant institution eliminates the established
non-conformity with the laws and regulations. Latvijas Banka
shall inform the relevant supervisory authority of institutions
of another Member State of the measures taken.
(3) If a branch of an institution licensed in another Member
State or an agent which is operating in Latvia, or an institution
licensed in another Member State which is providing financial
services without opening a branch therein continues the
performance of activities which are in contradiction with the
laws and regulations and thus is causing a situation requiring
immediate action in order to eliminate a serious threat to the
joint interests of payment service users and electronic money
holders in Latvia, Latvijas Banka shall inform the supervisory
authority of institutions of the relevant Member State thereof
and shall take measures in addition to that referred to in
Paragraph two of this Section in order to eliminate such
violations. When taking the necessary measures, Latvijas Banka
shall ensure equal treatment for payment service users and
electronic money holders of Latvia and institution of another
Member State. Latvijas Banka shall immediately inform the
supervisory authority of institutions of another Member State,
the European Commission, and the European Banking Authority of
the measures taken and their justification.
(31) When the established threat has been
eliminated, Latvijas Banka shall revoke the specified measures,
informing the relevant institution and its branch or agent
thereof.
(4) The requirements of Paragraphs one, two, 2.1,
three, and 3.1 of this Section shall not preclude
Latvijas Banka from performing activities to eliminate violations
which are in contradiction with the laws and regulations
protecting public interests and to impose punishments for these
violations.
(5) An administrative act of Latvijas Banka which has been
issued in accordance with this Law may be appealed to the
District Administrative Court. The court in the composition of
three judges shall examine the case as the court of first
instance. A judgement of the Regional Administrative Court may be
appealed by submitting a cassation complaint.
[17 March 2011; 24 April 2014; 20 June 2018; 23 September
2021; 9 November 2023]
Section 52. (1) Information on the institution and a
branch of the institution licensed in a Member State or an agent
which has commenced its operation in Latvia in accordance with
the procedures laid down in Section 31, Paragraph one of this
Law, and their customers, on the operation of the institution, a
branch of the institution licensed in a Member State or an agent
and transactions of their customers which has not been previously
published in accordance with the procedures laid down in the law
or disclosure of which is not determined in other laws or the
decision to disclose it has not been taken by Latvijas Banka, the
information received in accordance with the procedures laid down
in this Section from the competent authorities and persons of
Member States and foreign countries, and also from institutional
units and the information obtained in inspections for the needs
of supervision of a branch of the institution licensed in a
Member State or an agent, and also the information at the
disposal of Latvijas Banka on the operation of participants of
the financial market and payment systems shall be considered
restricted access information and shall be disclosed to third
parties only in the form of a report or a summary in a way which
precludes the possibility of identifying any particular
institution, branch of an institution licensed in a Member State
or an agent, or their customer. Such information on the
institution, a branch of the institution licensed in a Member
State or an agent and their customer, and also the operation of
the institution, a branch of the institution licensed in a Member
State or an agent and transactions of their customers shall have
the status of restricted access information also if insolvency
proceedings have been initiated or liquidation has been commenced
for the institution, an institution licensed in a Member State or
an agent, or their customer, or the institution, an institution
licensed in a Member State or an agent, or their customer (legal
person) has been liquidated.
(2) The provisions of Paragraph one of this Section shall not
preclude Latvijas Banka from provision of restricted access
information, according to its competence, to other supervisory
authorities of participants of the financial market of other
Member States by retaining the status of restricted access
information for the information provided.
(3) Latvijas Banka is entitled to use the information received
in accordance with Paragraphs one and thirteen of this Section
only for the performance of the supervisory functions:
1) in order to verify the conformity with the laws and
regulations governing obtaining an authorisation for the
operation of institutions and operation of institutions;
2) in order to apply the supervisory measures and sanctions
specified in this Law;
3) during court proceedings wherein the administrative acts
issued by Latvijas Banka or its actual actions are being
appealed.
(4) The prohibition of disclosing restricted access
information on the relevant economic operator by retaining the
status of restricted access information shall not apply to the
information:
1) which is used in court proceedings in a civil case if the
insolvency proceedings of the institution have been declared or
liquidation thereof has been initiated and such information is
not related to third parties involved in actions to improve the
financial situation of the institution;
2) which has been provided by Latvijas Banka to the court or
the person directing the proceedings in a criminal case on the
basis of a relevant request;
3) on a possible criminal offence established by Latvijas
Banka in the operation of the institution, a branch of the
institution licensed in a Member State or an agent, or the
payment system by informing the law enforcement institutions
thereof.
(5) When preserving the status of restricted access
information, the provisions of Paragraphs one and three of this
Section shall not preclude Latvijas Banka from providing
restricted access information, according to its competence,
to:
1) supervisory authorities of participants of the financial
market of another Member State, the European Central Bank, and
the European Banking Authority;
2) central banks of Member States and other authorities which
are responsible for the monitoring of payment systems if they
require such information for the fulfilment of the functions
specified for them in the law;
3) the authorities or persons which or who are responsible for
the discontinuation of payment services, insolvency, liquidation
of institutions and similar procedures specified in the legal
acts of other Member States, and also to the supervisory
authorities of such authorities or persons;
4) the authorities or persons which or who perform the
internal inspections and audits specified in the law in
institutions, and also to the supervisory institutions of such
authorities or persons;
5) the authorities or persons which or who are responsible for
detecting and investigating violations of the laws and
regulations in the field of commercial activity in Latvia.
(6) In respect of the information received from Latvijas Banka
and the supervisory authorities of the participants of the
financial market of the Member States, the authorities and
persons specified in Paragraph five of this Section shall meet
the following requirements:
1) only use the received information for carrying out the
responsibilities within the competence thereof;
2) it is prohibited for the authorities and persons specified
in Paragraph five of this Section, including the employees
thereof, during the fulfilment of their responsibilities and
after termination of an employment and other type of contractual
relationship with the authorities or persons referred to in
Paragraph five of this Section, to publicly or otherwise disclose
the information related to the activities of institutions or
payment systems which has not been published previously in
accordance with the procedures laid down by the law or disclosure
of which is not provided for in other laws. In accordance with
the procedures laid down in laws and regulations, the authorities
or persons referred to in this Section shall be responsible for
the unlawful disclosure of restricted access information and for
the losses caused to the third parties due to the unlawful action
of the authorities or persons referred to in this Paragraph;
3) the authorities or persons referred to in Paragraph five of
this Section are only entitled to disclose the received
information upon prior written consent of the persons who have
provided the relevant information and solely for the purpose for
which this consent has been given.
(7) Before information is sent to the authorities or persons
referred to in Paragraph five, Clauses 3, 4, and 5 of this
Section, the applicant for information shall notify the given
name and surname of such persons to the providers of this
information to whom the information should be sent and the
obligations of such persons, and also shall provide a
confirmation that the exchange of information is necessary for
the performance of the functions specified in the law, that
information will only be available to such persons who are
involved in the fulfilment of a task related to the processing of
the particular information, and that the requirements for the
protection of information are binding on the abovementioned
persons in conformity with the requirements of Paragraph six of
this Section.
(8) Information which has been received in conformity with
Paragraph one or thirteen of this Section or has been obtained by
performing inspections is provided to other State administration
institutions which are responsible for the conformity with the
laws and regulations in the field of the participants of the
financial market and the institutions if the supervisory
authority of the participants of the financial market of another
country from which the relevant information has been received or
in the country of which the inspection was performed has given a
consent to disclosure of such information.
(9) The provisions of this Section shall not preclude Latvijas
Banka from providing restricted access information to the
following international authorities in accordance with the
procedures laid down in Paragraph thirteen of this Section:
1) the International Monetary Fund and the World Bank - for
the assessments intended for the Financial Sector Assessment
Programme;
2) the Bank for International Settlements - for the
quantitative impact studies;
3) the Financial Stability Board - for the performance of its
functions.
(10) Latvijas Banka shall provide restricted access
information to the international authorities referred to in
Paragraph nine of this Section if a motivated request has been
received and the following conditions are met:
1) the request is sufficiently justified by taking into
account the particular tasks carried out by the requesting
authority in accordance with the laws and regulations governing
its operation;
2) the request is sufficiently accurate in relation to the
content and amount of the requested information and the means for
disclosure thereof;
3) a certification has been provided that the requested
information is necessary for the performance of particular tasks
of the requesting authority and it does not exceed the scope of
functions assigned to such authority in the laws and regulations
governing the operation thereof;
4) a certification has been provided that information will be
available only to such persons who are involved in the fulfilment
of the relevant task and the requirements for the protection of
information are binding on them.
(11) The international authorities referred to in Paragraph
nine of this Section may become acquainted with restricted access
information only in person in the premises of Latvijas Banka.
(12) Latvijas Banka is entitled to request information from
the institution on the basis of the request of the supervisory
authority of institutions of another Member State or the request
of such supervisory authority of institutions with which a
contract for exchange of information has been entered into. The
supervisory authority of institutions of another State is
entitled to disclose such information only upon a written consent
of Latvijas Banka and such information may only be used for the
purpose for which it has been requested.
(13) Latvijas Banka is entitled to enter into contracts for
exchange of information with the supervisory authorities of
foreign payment and electronic money institutions or the
authorities of the relevant foreign country the functions of
which are equivalent to the functions of the authorities referred
to in Paragraph five of this Section if the legal acts of such
foreign country provide for liability equivalent to the liability
specified in the laws and regulations of the Republic of Latvia
for unauthorised disclosure of restricted access information and
the requirements in force in Latvia in the field of personal data
protection have been met. Such information shall only be used for
the supervision of financial market participants or the relevant
authorities for the performance of the functions laid down by
law. The relevant foreign institutions are entitled to disclose
the received information only with a written consent of Latvijas
Banka and only for the purposes for which such consent was
given.
[23 September 2021 / Amendment regarding the
replacement of the word "the Commission" with the words "Latvijas
Banka" and amendment regarding the replacement of the words
"financial and capital market" with the words "financial market"
shall come into force on 1 January 2023. See Paragraph 41
of Transitional Provisions]
Section 53. [23 September 2021 / See Paragraph 41 of
Transitional Provisions]
Section 54. Payment systems functioning in Latvia shall
ensure objective, non-discriminating, and commensurate access
(holding) conditions for registered payment service providers -
legal persons. Payment systems do not have the right to restrict
access to the system (participation in the system) more than is
justifiably necessary to protect the system from the settlement,
operational, and commercial activity risks or to ensure the
operational or financial stability of the system.
Section 55. (1) Payment systems functioning in Latvia
shall not be permitted to specify any of the following conditions
to payment service providers, payment service users, or other
payment systems:
1) restricting conditions in relation to actual participation
in other payment systems;
2) a condition which mutually discriminates payment service
providers which have received a licence or registered payment
service providers in relation to their rights and
obligations;
3) a condition which includes a restriction that is based on
the status of the institution.
(2) Paragraph one of this Section and the provisions of
Section 54 of this Law shall not be applied to:
1) the payment systems specified in the law On Settlement
Finality in Payment and Financial Instrument Settlement
Systems;
2) the payment systems which only include such payment service
providers which are in one group of commercial companies;
3) [20 June 2018].
(3) If the provisions of the payment system specified in the
law On Settlement Finality in Payment and Financial Instrument
Settlement Systems provide for it and a system participant
ensures a possibility for the payment service provider which is
not a system participant to make transfers via the system, a
participant has an obligation to ensure such possibility also to
another payment service provider in an objective, commensurate,
and non-discriminating manner in accordance with that specified
in Section 54 of this Law.
(4) If a participant of the system referred to in Paragraph
three of this Section denies the institution the transfers via
the relevant system, it shall justify its refusal to the
institution.
[20 June 2018]
Section 55.1 (1) A credit institution has an
obligation to ensure institutions and foreign exchange companies
with objective, commensurate, and non-discriminating access to
the payment account services provided by the credit institution.
Such access shall be sufficiently extensive for the institution
and foreign exchange company to be able to efficiently provide
payment services, electronic money services, and foreign exchange
trading services in an unhindered manner.
(2) A credit institution shall, without delay, but not later
than within five business days, notify Latvijas Banka of each
refusal of the access referred to in Paragraph one of this
Section, appending a relevant justification thereto. The credit
institution shall send such notification to Latvijas Banka in
electronic form.
[20 June 2019; 23 September 2021 / The new wording
of Paragraph one and amendment regarding the replacement of the
word "the Commission" with the words "Latvijas Banka" shall come
into force on 1 January 2023. See Paragraphs 41 and 42 of
Transitional Provisions]
Section 56. (1) If Latvijas Banka establishes that a
payment system, a payment service provider, or an electronic
money institution fails to comply with the requirements of this
Law, the regulations issued by Latvijas Banka, or the directly
applicable legal acts of the European Union in the field of
payment services and electronic money, it is entitled to
implement and apply the following upon taking a decision:
1) the following supervisory measures:
a) to request the person who is responsible for the operation
of the payment system, the payment service provider, or the
electronic money institution to immediately take measures which
are necessary to eliminate the non-conformity of the operation
with the laws and regulations and to submit an action plan to
Latvijas Banka within the time period specified thereby;
b) to give to the person who is responsible for the operation
of the payment system, the payment service provider, or the
monitoring bodies and executive bodies of the electronic money
institution, as well as to heads and members of such institutions
written orders which are necessary to limit or suspend the
operation of the payment system, payment service provider, or
electronic money institution which endangers or may endanger
their stability, solvency, or reputation;
c) to impose restrictions on the operation of the payment
service provider or electronic money institution, including to
partially or completely suspend the provision of payment
services;
d) to partially or completely suspend the issuing of
electronic money to the electronic money institution;
2) the following sanctions:
a) to give a warning to the person who is responsible for the
operation of the payment system, the payment service provider,
the electronic money institution or the natural person
responsible for the violation;
b) to impose an obligation on the meeting of stockholders,
meeting of shareholders, supervisory board, or executive board of
the person who is responsible for the operation of the payment
system, the payment service provider, the electronic money
institution to remove from the office a member of the executive
board or supervisory board, the person who is directly
responsible for the management of the operation of payment
services of the institution or the issuing of electronic money,
the person who is responsible for the fulfilment of the
requirements for the prevention of money laundering and terrorism
and proliferation financing, or a procuration holder;
c) to impose a fine on the legal person or the natural person
responsible for the violation in the amount of up to EUR 142 300
for violations of the requirements laid down in this Law or the
regulations issued by Latvijas Banka, or the directly applicable
legal acts of the European Union in the field of payment services
and electronic money;
d) to cancel the licence in accordance with Section 25,
Paragraph one, Clauses 2 and 7 of this Law or to cancel the entry
in the register referred to in Section 10, Paragraph three of
this Law in accordance with Section 25.1, Paragraph
one, Clauses 2 and 5 of this Law, or to cancel the registration
entry in the register referred to in Section 26.1,
Paragraph two of this Law in accordance with Section
26.2, Paragraph one, Clauses 1 and 2.
(2) For the violations of the laws and regulations in the
field of the prevention of money laundering and terrorism and
proliferation financing, Latvijas Banka shall apply the sanctions
specified in the Law on the Prevention of Money Laundering and
Terrorism and Proliferation Financing.
(21) If Latvijas Banka establishes that the payment
service user or the electronic money holder which is not
considered to be a consumer fails to comply with the requirements
laid down by the directly applicable legal acts of the European
Union in the field of payment services and electronic money, it
is entitled to give a warning or to impose a fine of up to EUR
142 300 to the payment service user or the electronic money
holder which is not considered to be a consumer.
(22) If Latvijas Banka establishes that the
operation of the payment system or the issuing of electronic
money is carried out or the payment services are provided without
obtaining a relevant licence or registration, Latvijas Banka is
entitled to express a warning to the natural or legal person
liable for the violation or to impose a fine of up to EUR 142
300.
(3) If Latvijas Banka, on the basis of the provisions of
Paragraphs one, two, 2.1, and 2.2 of this
Section, has issued an administrative act, except for the
decision to impose a fine, the appeal of such act shall not
suspend its operation.
(4) Latvijas Banka shall post the information on the sanctions
and supervisory measures imposed on the person in accordance with
Paragraphs one and two of this Section on its website by
indicating information on the person and the violation committed
thereby, and also on contesting the administrative act issued by
Latvijas Banka, the ruling adopted, and its appeal.
(5) Latvijas Banka may publish the information referred to in
Paragraph four of this Section without identifying the person if
it is established after an ex-ante assessment that disclosing of
the data of the relevant natural or legal person may endanger the
stability of the financial market or cause incommensurate harm to
the persons involved.
(6) If it is foreseeable that the circumstances referred to in
Paragraph five of this Section may end in a commensurate period
of time, publishing of the information referred to in Paragraph
four of this Section may be postponed for such period of
time.
(7) The information posted on the website of Latvijas Banka in
accordance with the procedures laid down in this Section shall be
available for five years from the day of its posting.
[2 March 2017; 26 October 2017; 7 November 2019; 17 June
2020; 23 September 2021 / Amendment regarding the
replacement of the word "the Commission" with the words "Latvijas
Banka" and amendment regarding the replacement of the words
"regulatory provisions" with the word "regulations" shall come
into force on 1 January 2023. See Paragraph 41 of
Transitional Provisions]
Chapter VII
Conditions for the Provision of Payment Services, Holding of
Electronic Money, and Redeeming of Electronic Money and
Information Requirements
[17 March 2011]
Section 57. [2 March 2017]
Section 58. (1) Payments shall be made in the currency
upon which the payment service provider and the service user have
agreed.
(2) If, prior to commencing a payment at the site of selling
goods or providing services, the seller offers the payer to
perform currency conversion or if it is offered by the payee to
perform currency conversion, the person who is offering such
currency conversion service to the payer has an obligation to
inform the payer of the fee, as well as the exchange rate to be
used for converting the payment amount.
Section 58.1 (1) If a payment service
provider offers to open a payment account as part of a package
together with another service which is not linked to the payment
account, it shall inform the consumer of the individual fee for
each service included in the package. The payment service
provider shall inform the consumer as to whether it is also
possible to open a payment account separately.
(2) If one or several services are offered as parts of a
package of services linked to the payment account, the payment
service provider shall indicate the fee for the whole package, as
well as the individual fee for each service included therein in
information regarding the applicable fee.
(3) The payment service provider shall provide the information
provided for in this Section free of charge in the customer
service premises or website thereof, and also - upon a request -
in printed form or using another durable medium.
[2 March 2017; 23 September 2021]
Section 59. (1) Where, for the use of a given payment
instrument, the payee offers a reduction, it shall inform the
payer thereof prior to the initiation of the payment.
(2) Where, for the use of a given payment instrument, the
payment service provider or another party involved in the payment
requests a fee, it shall inform the payment service user thereof
prior to the initiation of the payment transaction, unless the
payment service provider has provided such information in
accordance with the requirements of Section 63 of this Law. The
payer does not have an obligation to pay the fee referred to in
this Paragraph if it was not informed of such fee before the
initiation of the payment.
(3) The electronic money issuer is prohibited from granting
interest or other financial benefit to the electronic money
holder for a set of activities which is related to the holding of
electronic money during a specific period of time.
[17 March 2011; 20 June 2018]
Section 59.1 (1) A payment service provider
shall ensure that the informative leaflet developed by the
European Commission regarding consumer rights in the field of
payment services can be easily accessed by a consumer on their
relevant websites, if any, and in printed form at their branches,
with their representatives and outsourcing service providers, if
any.
(2) The payment service provider shall ensure the information
in the informative leaflet to the consumer free of charge.
(3) In relation to persons with disability, the provisions of
this Section shall be applied by using relevant alternative means
in order to ensure that the information included in the leaflet
is available to such persons in a form that is
comprehensible.
[23 September 2021]
Section 60. (1) A payment service provider shall
provide the information specified in Chapters VII, VIII, and IX
of this Law to a payment service user free of charge.
(2) Upon agreement with the payment service user, the payment
service provider may collect a fee if upon a request of the
payment user:
1) the information is provided more often than determined in
the framework contract;
2) the information is provided using other means of
communication than specified in the framework contract;
3) not only the information specified in the framework
contract, but also additional information is provided.
(3) If the payment service provider determines a fee for the
provision of information in accordance with Paragraph two of this
Section, such fee shall be determined in a justified manner
corresponding to the actual costs of the payment service
provider.
Section 60.1 (1) Latvijas Banka shall issue
regulations determining the list of standardised terms and
definitions of terms (hereinafter - the list of standardised
terms) of services linked to a payment account and widely used by
consumers in the territory of the Republic of Latvia (hereinafter
- the services most frequently used by consumers). Latvijas Banka
shall evaluate and, if necessary, update the list of standardised
terms once in four years.
(2) The payment service provider shall provide information to
the consumer regarding the fee applied thereby to the services
most frequently used by consumers (hereinafter - the price list
of services). Latvijas Banka shall determine the minimum
requirements in relation to the content and form of the price
list of services.
(3) The payment service provider may supplement the price list
of services and the list of standardised terms with information
regarding other services linked to a payment account offered
thereby. The payment service provider shall ensure the consumer
with free access to the abovementioned documents at the customer
service premises or on the website thereof. The consumer has the
right, upon a request, to receive the abovementioned documents in
printed form or using another durable medium.
(4) The payment service provider shall, in a timely manner,
prior to conclusion of a framework contract regarding a payment
account, ensure the consumer with the information referred to in
Paragraph three of this Section in the official language or in
another language upon which the parties have agreed.
(5) The payment service provider may fulfil the obligations
referred to in Paragraphs three and four of this Section also by
providing a price list to the consumer together with the draft
framework contract if the requirements of Latvijas Banka laid
down in accordance with Paragraph two of this Section have not
been violated.
[2 March 2017; 23 September 2021 / Amendment
regarding the replacement of the word "the Commission" with the
words "Latvijas Banka" and amendment regarding the replacement of
the words "regulatory provisions" with the word "regulations"
shall come into force on 1 January 2023. See Paragraph 41
of Transitional Provisions]
Section 60.2 (1) The payment service
provider shall, at least once a year free of charge, provide a
report on the fee applied to such services which are linked to a
payment account in accordance with Paragraph two of this Section,
using the means (type) of communication upon which the parties
have agreed.
(2) Latvijas Banka shall determine the minimum requirements in
relation to the content, form, and type of provision of the
report on the fee applied to services (hereinafter - the report
on the service fee). The payment service provider is entitled to
provide the report on the service fee together with another
information to be provided to the consumer regarding services
which are linked to a payment account if the requirements of
Latvijas Banka laid down in accordance with this Paragraph are
not violated.
[2 March 2017; 23 September 2021 / Amendment
regarding the replacement of the word "the Commission" with the
words "Latvijas Banka" shall come into force on 1 January
2023. See Paragraph 41 of Transitional Provisions]
Section 60.3 (1) The payment service
provider shall use in the contract intended for the consumer and
in provision of any other information the standardised terms
which have been stipulated by Latvijas Banka in accordance with
Section 60.1, Paragraph one of this Law.
(2) If the brand name used by the payment service provider
which designates the service provided can be unequivocally linked
to a relevant service included in the standardised list of terms,
it may be used in the contract intended for the consumer and in
provision of any other information.
(3) In addition to the standardised terms the payment service
provider may use brand names as additional designations of the
relevant services in the price list of services and the report on
the service charge.
[2 March 2017; 23 September 2021 / Amendment
regarding the replacement of the word "the Commission" with the
words "Latvijas Banka" shall come into force on 1 January
2023. See Paragraph 41 of Transitional Provisions]
Section 61. (1) If a dispute arises between the payment
service provider and the payment service user, the payment
service provider has an obligation to prove to the payment
service user that the former has complied with the information
requirements laid down in Chapters VII, VIII, and IX of this
Law.
(2) The non-disclosable information at the disposal of the
payment service provider shall be provided to a State authority,
public official, or another institution and official according to
the same procedures as credit institutions in accordance with the
provisions of Section 63 of the Credit Institution Law.
Section 62. If the payment service user is using a
payment instrument which, according to the framework contract,
concerns only individual payments that do not exceed EUR 30 or
that either have a spending limit of EUR 150 or store funds that
do not exceed EUR 150 at any time:
1) the payment service provider shall provide the payer with
information regarding the way of use of the payment service,
liability of the payment service provider and the payment service
user, fees applicable to the payment, and other information
needed for the payer to take a justified decision in relation to
the use of the payment service, as well as an indicate where any
other information referred to in Section 64 of this Law is made
available;
2) the payment service provider and the payment service user
may agree that, upon making amendments to the framework contract,
the provisions of Section 66 of this Law need not be applied;
3) the payment service provider and the payment service user
may agree that after making a payment:
a) the payment service provider makes available information
only with a reference enabling the payment service user to
identify the payment, the amount of the payment, as well as any
fee paid by the payment service user to the payment service
provider for the payment service. If several payments of the same
kind are made to the same payee, the payment service provider
shall make available information thereto regarding the total
amount and fee for those payments which is paid by the payment
service user to the payment service provider for the payment
service;
b) the payment service provider does not have an obligation to
provide the information referred to in Sub-clause "a" of this
Clause, if the payment instrument is used anonymously or if, due
to the characteristics of the payment instrument, the information
referred to in Sub-clause "a" of this Clause is not available to
the payment service provider. In such cases the payment service
provider shall provide the payer with a possibility to verify the
amount of money stored in the payment instrument.
Section 62.1 (1) An electronic money issuer
has an obligation, upon a request of the electronic money holder,
to redeem, at any moment and at par value, the monetary value of
the electronic money held by the latter.
(2) The conditions and procedures for redeeming electronic
money shall be determined in the contract between the electronic
money issuer and the electronic money holder, indicating also the
fee for redeeming electronic money therein. The electronic money
holder shall be informed of such conditions before it is being
bound by the contract or before it agrees to the offer of the
electronic money issuer.
(3) The fee determined for redeeming electronic money shall be
commensurate with the actual costs which have been incurred by
the electronic money issuer. The fee may only be applied if
stated in the contract referred to in Paragraph two of this
Section and in one of the following cases:
1) redemption is requested before the termination of the
contract;
2) the contract provides for a termination date and the
electronic money holder terminates the contract before the
abovementioned date;
3) redemption is requested more than one year after the date
of termination of the contract.
(4) Upon requesting redemption of electronic money within a
year after termination of the contract referred to in Paragraph
two of this Section, the electronic money holder shall redeem the
total monetary value of the electronic money held. If the
electronic money issuer is an electronic money institution which
conducts the commercial activity referred to in Section
36.1, Paragraph one, Clause 4 of this Law and it is
not known which part of the funds will be used as electronic
money thereby, the electronic money institution shall redeem all
the funds requested for redemption by the electronic money
holder.
(5) If redemption of electronic money is requested before the
termination of the contract referred to in Paragraph two of this
Section, the electronic money holder may request complete or
partial redemption of the electronic money.
(6) A person, other than a consumer, who accepts electronic
money for the settlement of accounts shall agree with the
electronic money issuer on the right to redeem the electronic
money by concluding the contract referred to in Paragraph two of
this Section.
[17 March 2011; 2 March 2017]
Chapter VIII
Payments Subject to the Framework Contract
Section 63. (1) Before conclusion of a framework
contract or before a payment service user has agreed to use the
offer, the payment service provider shall provide the service
user with the information provided for in Section 64 of this Law
in printed form or using another durable medium. Information
regarding payment services offered in Latvia shall be provided in
a clear and comprehensible form in the official language or in
any other language agreed between the parties.
(2) If, upon a request of the payment service user, the
framework contract has been concluded using a means of distance
communication and as a result it is not possible to fulfil the
obligations specified in Paragraph one of this Section, the
payment service provider shall fulfil its obligations immediately
after conclusion of the framework contract.
(3) The payment service provider may fulfil the obligations
referred to in Paragraph one of this Section also by submitting a
draft framework contract to the payment service user if it
contains the information referred to in Section 64 of this
Law.
Section 64. The payment service provider shall provide
the following information to the payment service user in the
framework contract:
1) regarding the payment service provider:
a) the name, legal address, electronic mail address of the
payment service provider and other addresses to be used for
communications with the payment service provider, as well as the
legal address of the agent or branch of the payment service
provider in Latvia if payment services are provided through an
agent or branch. If a payment service provider established and
registered in Latvia is providing payment services in another
Member State - also the legal address of its agent or branch in
the Member State in which payment services are offered;
b) a reference to Latvijas Banka or the supervisory authority
of the payment service provider as well as a reference to the
register provided for in Section 10 of this Law in which the
relevant payment service provider is registered;
2) regarding use of the payment services:
a) a description of the payment service to be provided;
b) a specification of the information or unique identifier
that has to be provided by the payment service user in order for
a payment order to be properly executed;
c) the form for giving consent to execute a payment and
withdrawal of such consent in accordance with the provisions of
Sections 80 and 92 of this Law;
d) a reference to the time of considering a payment order
received in accordance with Section 90 of this Law and
discontinuing acceptance of payment orders, if such has been
established by the payment service provider;
e) the maximum execution time for the payment service;
f) whether there is a possibility to agree on spending limits
for the use of the payment instrument in accordance with Section
81, Paragraph one of this Law;
g) a reference to the rights of the payment service user in
accordance with Article 8 of Regulation (EU) 2015/751 of the
European Parliament and of the Council of 29 April 2015 on
interchange fees for card-based payment transactions (Text with
EEA relevance) if co-badged, card-based payment instruments are
used;
3) regarding fees, interest, and exchange rates:
a) all fees payable by the payment service user to the payment
service provider for the payment service and the breakdown of
such charges;
b) the interest and exchange rates to be applied to the
payment or, if reference interest and exchange rates are to be
used, - the method of calculating the actual interest rates and
the relevant reference interest or exchange rate which is used as
base for currency exchange, as well as the date of determining
such rates or currency exchange rate;
c) a reference that changes in reference interest or reference
currency rates are applied immediately without prior warning and
that information regarding such changes will be provided to the
payment service user in accordance with Section 66, Paragraphs
three, four, and five of this Law if the payment service user and
the payment service provider have agreed thereon;
4) regarding communication:
a) information regarding the means of communication, including
the technical requirements for equipment and software of the
payment service user regarding the use of which for transmission
of the information or notifications specified in this Law the
payment service provider and the payment service user have agreed
upon;
b) the manner in, and frequency with which, information
specified in this Law is to be provided or made available;
c) the language or languages in which the framework contract
will be concluded and the parties thereto will communicate during
this contractual relationship;
d) a reference to the right of the payment service user to
receive the information in accordance with Section 65 of this
Law;
5) regarding safety measures:
a) a description of the measures that the payment service user
is to take in order to keep safe a payment instrument and
information regarding how to notify the payment service provider
for the purposes of Section 82, Paragraph one, Clause 2 of this
Law;
b) a reference to the cases in which the payment service
provider has the right to block a payment instrument in
accordance with Section 81, Paragraph two of this Law if the
payment service user and the payment service provider have agreed
thereon;
c) information regarding the liability of the payer in
accordance with Section 87 of this Law;
d) information regarding how and within what period of time
the payment service user is to notify the payment service
provider of any unauthorised or incorrectly made payment in
accordance with Section 84 of this Law, as well as the liability
of the payment service provider for an unauthorised payment in
accordance with Section 86 of this Law;
e) information regarding the liability of the payment service
provider for the initiation or making of payments in accordance
with Section 99 of this Law;
f) the conditions for refund in accordance with Sections 88
and 89 of this Law;
g) the procedures for the notification of the payment service
user by the payment service provider of a potential fraud,
security threats or suspicions of them;
6) regarding amendments to and termination of the framework
contract:
a) an indication that the payment service user will be deemed
to have agreed to amendments to the framework contract if it has
not notified the payment service provider before the date of
their proposed date of entry into effect that it has objections
against such amendments, if the payment service provider and the
payment service user have agreed upon it in accordance with
Section 66, Paragraph two of this Law;
b) the duration of the framework contract;
c) the right of the payment service user to terminate the
framework contract, as well as any agreements relating to
termination of the contract in accordance with Section 66,
Paragraph one and Section 67 of this Law;
7) regarding examination of complaints and the issue of
compensating the losses:
a) the laws and regulations applicable to the framework
contract and the court the competence of which includes
examination of cases linked to framework contracts;
b) a reference to out-of-court procedures for handling and
appeal of complaints available to the payment service user in
accordance with Sections 105 and 106 of this Law.
[20 June 2018; 23 September 2021 / Amendment
regarding the replacement of the word "the Commission" with the
words "Latvijas Banka" shall come into force on 1 January
2023. See Paragraph 41 of Transitional Provisions]
Section 65. During the term of validity of the
framework contract the payment service user has the right to
receive information, upon a request, regarding the provisions of
the framework contract, as well as the information and provisions
indicated in Section 64 of this Law in printed form or using
another durable medium.
Section 66. (1) The payment service provider shall
propose amendments to the framework contract, as well as to the
information and provisions indicated in Section 64 of this Law in
accordance with the provisions of Section 63, Paragraph one of
this Law and not later than two months before the proposed
(planned) day of entering into effect of such amendments.
(2) The payment service provider may agree with the payment
service user that the service user has agreed to amendments to
the framework contract, if it has not notified the payment
service provider of its objections against such amendments until
the proposed (planned) day of entering into effect of such
amendments to the framework contract. In such case, the payment
service provider shall also indicate that the payment service
user has the right, without delay and free of charge, and without
imposition of sanctions, to terminate the framework contract
until the day of entering into effect of the relevant
amendments.
(3) Changes in the interest or currency rates may be applied
without prior notification if an agreement thereon in the
framework contract has been reached and if such reference
interest or reference currency rates are at the basis of such
changes upon which the payment service provider and the payment
service user have agreed in accordance with the provisions of
Section 64, Clause 3, Sub-clauses "b" and "c" of this Law.
(4) In the cases referred to in Paragraph three of this
Section the payment service provider shall inform the payment
service user as soon as possible in accordance with the
provisions of Section 63, Paragraph one of this Law, except if
such persons have agreed upon another way in which the payment
service provider provides or makes available the relevant
information.
(5) Changes in the interest or currency rates which are more
favourable to the payment service user may be applied without
prior notification.
(6) Upon calculating and applying the changes in the interest
or currency rates used in payments, discrimination of the payment
user is not permissible.
[20 June 2018]
Section 67. (1) The payment service user may terminate
the framework contract at any time, except when the payment
service provider and the payment service user have agreed upon a
time period of prior notification for the termination of the
framework contract. The time period of prior notification may not
be longer than one month.
(2) If the framework contract has been concluded for an
indefinite period or for a time period exceeding six months and
the payment service user terminates the framework contract after
six months, the payment service provider shall not impose a fine
on the termination of the framework contract. In other cases when
a fine is intended for the termination of the framework contract,
it shall be determined in commensuration with the expenses.
(3) If a relevant agreement has been reached in the framework
contract, the payment service provider may terminate the
framework contract which has been entered into for an indefinite
period, informing the payment service user thereof at least two
months in advance in accordance with the provisions of Section
63, Paragraph one of this Law.
(4) The fee which is regularly collected by the payment
service provider for the payment service shall be paid by the
payment service user in proportion to the period of use thereof
until termination of the framework contract. If such fee is
collected in advance, the payment service provider shall refund
it in proportion.
[20 June 2018 / Amendments to Paragraph two shall
come into force on 1 October 2018. See Paragraph 35 of
Transitional Provisions]
Section 68. If, according to the framework contract, a
payment commenced by a payer is made, a payment service provider
shall, upon a request of the payer prior to commencement of the
payment, provide information regarding the maximum period of its
making thereof and the fee for the service to be covered by the
payer, as well as the breakdown of such fee.
Section 69. (1) After the amount of the payment is
written off of the account of the payer or - in cases when the
payer is not using a payment account - after receipt of the
payment order the payment service provider shall, without delay
in accordance with the provisions of Section 63, Paragraph one of
this Law, provide the following information to the payer:
1) a reference enabling the payer to identify each payment
and, if possible, information regarding the payee;
2) the amount of the payment in currency in which such amount
has been written off of the account of the payer, or in currency
which is used in the payment order;
3) the fee for the service paid by the payment service user
and the breakdown of such fee or also interest paid by the
payment service user;
4) the currency rate used by the payment service provider of
the payer in the payment and the amount of the payment after
currency conversion if currency conversion has been
performed;
5) the value date for writing off of the amount of the payment
from the account of the payer or the date of receipt of the
payment order.
(2) The framework contract may contain a provision that the
information referred to in Paragraph one of this Section is
provided or made available at least once a month, and indicate
the way in which the information is to be provided, ensuring a
possibility for the payer to store and update such information
unchanged.
Section 70. (1) After a payment has been made, the
payment service provider of the payee shall, without delay in
accordance with the provisions of Section 63, Paragraph one of
this Law, provide or make available the following information to
the payee:
1) a reference enabling the payee to identify the payment and,
if possible, also the payer, and any information which has been
submitted together with the payment;
2) the amount of the payment in currency in which such sum was
transferred to the payment account of the payee;
3) the fee for the service paid by the payment service user
and the breakdown of such fee or also interest paid by the
payment service user;
4) the currency rate used by the payment service provider of
the payee in the payment and the amount of the payment before
currency conversion if currency conversion has been
performed;
5) the value date for the transfer of the money into the
account.
(2) The framework contract may contain a provision that the
information referred to in Paragraph one of this Section is
provided or made available at least once a month, and indicate
the way in which the information is to be provided, ensuring a
possibility for the payee to store and update such information
unchanged.
[12 May 2011]
Section 70.1 The framework contract may
contain a provision that the payment service provider provides or
makes available information of the account statement to the
payment service user upon a request or within a specific period
of time upon agreement, indicating the way in which the account
statement must be provided, including ensuring a possibility to
store and update such information unchanged.
[12 May 2011]
Chapter IX
Single Payments
Section 71. (1) This Chapter shall be applied to single
payments not covered by a framework contract.
(2) If a payment order for a single payment is submitted
through a payment instrument covered by a framework contract, the
payment service provider shall not be obliged to provide or make
available information which has already been provided to the
payment service user on the basis of the framework contract with
another payment service provider or which will be provided
thereto according to this framework contract.
Section 72. (1) Before the payment service user commits
to use the single payment service, the payment service provider
shall, in an easily accessible manner, make available to the
payment service user the information referred to in Section 73 of
this Law . Upon a request of the service user, the payment
service provider shall provide such information in printed form
or on any other durable medium. Information regarding the payment
services offered in Latvia shall be given in easily
understandable words and in a clear and comprehensible form in
the official language or in any other language agreed between the
payment service provider and the payment service user.
(2) If, upon a request of the payment service user, the
payment service provider and the payment service user agree upon
the single payment service, using a means of distance
communication, and as a result the obligations specified in
Paragraph one of this Section cannot be fulfilled, the payment
service provider shall fulfil these obligations immediately after
the execution of the payment.
(3) The payment service provider may fulfil the obligations
referred to in Paragraph one of this Section also by submitting a
draft contract or draft payment order to the payment service user
if it includes the information referred to in Section 73 of this
Law.
Section 73. (1)A payment service provider shall provide
or make available to a payment service user the following
information:
1) a reference to the information or unique identifier that
has to be provided by the service user in order for a payment
order to be properly executed;
2) the maximum execution time for the payment service to be
provided;
3) the fee for the service payable by the payment service
user, and the breakdown of such fee;
4) the actual or reference exchange rate to be applied to the
payment if currency will be exchanged.
(11) Before the initiation of a payment, the
payment initiation service provider shall provide or make
available to the payment service user the following
information:
1) the name, legal address, electronic mail address of the
payment initiation service provider and other information to be
used for communication with the payment initiation service
provider, and also the legal address of the representative or
branch of the payment initiation service provider in Latvia if
payment services are provided through a representative or
branch;
2) a reference to Latvijas Banka or the supervisory authority
of the payment initiation service provider and their contact
details.
(2) The payment service provider shall, in an easily
accessible manner, also make available to the payment service
user other information specified in Section 64 of this Law if it
applies to the payment service and is at the disposal of the
payment service provider.
(3) The payment initiation service provider shall, immediately
after initiating the payment, provide or make available to the
payer and, where applicable, the payee the following
information:
1) confirmation of the successful initiation of the payment
order with the payer's account servicing payment service
provider;
2) a reference enabling the payer and the payee to identify
the payment and, where appropriate, the payee to identify the
payer, and any information transferred with the payment;
3) the amount of the payment;
4) the fee payable to the payment initiation service provider
for the service, if such has been specified, and the breakdown of
the fee.
(4) If a payment is initiated through a payment initiation
service provider, it shall notify the account servicing payment
service provider of the payment reference.
[20 June 2018; 23 September 2021 / Amendment
regarding the replacement of the word "the Commission" with the
words "Latvijas Banka" shall come into force on 1 January
2023. See Paragraph 41 of Transitional Provisions]
Section 74. Immediately after receipt of the payment
order, the payment service provider of the payer shall, in the
same way as specified in Section 72, Paragraph one of this Law,
provide the payer with or make available to the payer the
following information:
1) a reference enabling the payer to identify the payment and
information regarding the payee if such has been indicated in the
payment order;
2) the amount of the payment in the currency indicated in the
payment order;
3) the fee for the service payable by the payment service user
and the breakdown of such fee;
4) the exchange rate used by the payment service provider of
the payer in the payment if currency is exchanged. If, upon
executing the payment service, the exchange rate used differs
from the rate of which the payer was informed in accordance with
Section 73, Paragraph one, Clause 4 of this Law, the payment
service provider shall inform the payer of the used exchange rate
used. The payment service provider shall inform the payment
service user of the amount of the payment after currency
exchange;
5) the date of receipt of the payment order.
Section 75. Immediately after the execution of a
payment, the payment service provider of the payee shall, in
accordance with Section 72, Paragraph one of this Law, provide
the payee with or make available to the payee the following
information:
1) a reference enabling the payee to identify the payment and,
if possible, also the payer, and other information which has been
submitted together with the payment;
2) the amount of the payment in the currency in which such sum
is at the disposal of the payee;
3) the fee for the service payable by the payment service user
and the breakdown of such fee;
4) the exchange rate and the amount of the payment before
currency conversion if the payment service provider of the payee
has exchanged the currency;
5) the value date for the transfer of the money into the
account.
Chapter
IX.1
Switching of Payment Accounts
[2 March 2017]
Section 75.1 This Chapter shall apply to
payment accounts which have been opened for the payment service
user - consumer - with payment service providers the place of
conducting commercial activity of which is Latvia.
[2 March 2017]
Section 75.2 (1) The payment service
provider shall provide an account switching service in accordance
with the procedures provided for in this Law and in the
regulations referred to in Paragraph two of this Section if the
transferring payment service provider and the receiving payment
service provider provide services linked to a payment account in
Latvia and both payment accounts are in euro currency.
(2) Latvijas Banka shall issue the regulations in which the
procedures for providing an account switching service, including
the content and form of an account switching request, is
determined.
(3) A consumer shall submit an account switching request to
the receiving payment service provider with which it is opening
or holding a payment account. The account switching request of
the consumer shall contain a consent of the consumer that the
information regarding the consumer, its payment account and
transactions made therein will be provided to the payment service
provider involved in account switching and will be used for
activities linked to account switching.
(4) Within the scope of payment account switching change the
transferring payment service provider may not block payment
instruments before the date indicated in the request of the
consumer, except for the cases referred to in Section 81,
Paragraph two of this Law.
[2 March 2017; 23 September 2021 / Amendment
regarding the replacement of the word "the Commission" with the
words "Latvijas Banka" and amendment regarding the replacement of
the words "regulatory provisions" with the word "regulations"
shall come into force on 1 January 2023. See Paragraph 41
of Transitional Provisions]
Section 75.3 (1) The transferring and
receiving payment service provider shall, free of charge, provide
the information at its disposal to the consumer regarding the
valid regular payment orders submitted thereby and the direct
debit payment in the payment account of the consumer.
(2) The transferring payment service provider shall, free of
charge, provide information to the receiving payment service
provider which has been requested thereby within the scope of the
account switching service in accordance with the regulations of
Latvijas Banka referred to in Section 75.2, Paragraph
two of this Law.
(3) Upon closing the payment account of the payment service
user, the transferring payment service provider shall take into
account the provisions of Section 67, Paragraphs two and four of
this Law.
(4) If the consumer is using an account switching service and
requests closing of a payment account, the transferring payment
service provider shall terminate the framework contract and close
the payment account on the date indicated in the request of the
consumer if all the liabilities arising from the use of the
payment account have been settled and other activities indicated
in the request have been completed. The payment service provider
shall, without delay, inform the consumer if the outstanding
liabilities of the consumer prevent the framework contract from
being terminated or the payment account from being closed.
(5) If it is intended that the payment service user shall pay
for the account switching service, the payment service provider
shall determine the service fee commensurate to the actual costs
of the service, in conformity with the provisions of Paragraphs
one, two, and three of this Section.
[2 March 2017; 23 September 2021 / Amendment
regarding the replacement of the word "the Commission" with the
words "Latvijas Banka" and amendment regarding the replacement of
the words "regulatory provisions" with the word "regulations"
shall come into force on 1 January 2023. See Paragraph 41
of Transitional Provisions]
Section 75.4 The payment service provider
involved in the provision of an account switching service shall,
without delay, compensate any financial losses to the payment
service user which have arisen for the very reason that the
abovementioned payment service provider has not fulfilled the
obligations linked to the account change service or has been late
in the fulfilment of such obligations.
[2 March 2017]
Section 75.5 The payment service provider
shall, upon request of the payment service user, provide the
following information thereto free of charge regarding provision
of an account switching service in printed form or on another
durable medium, and also continuously at its customer service
premises and on its website:
1) the tasks of the transferring and receiving payment service
provider for each step of the account switching process, as
indicated in the regulations of Latvijas Banka;
2) the time-frame for the completion of the respective
steps;
3) the fees, if any, charged for the account switching
service;
4) information that the payment service user will be asked to
provide by the relevant payment service provider;
5) the out-of-court dispute handling procedures in accordance
with Sections 105 and 106 of this Law;
6) information regarding whether the payment service provider
is a participant in the Deposit Guarantee Fund.
[2 March 2017; 23 September 2021 / Amendment
regarding the replacement of the word "the Commission" with the
words "Latvijas Banka" and amendment regarding the replacement of
the words "regulatory provisions" with the word "regulations"
shall come into force on 1 January 2023. See Paragraph 41
of Transitional Provisions]
Section 75.6 (1) If a consumer wishes to
open a payment account with a payment service provider located in
another Member State, the payment service provider with which the
consumer holds a payment account in Latvia shall, upon receipt of
the relevant request, take the following activities:
1) provide the consumer with a list of all the currently
active standing orders and debtor-driven direct debit mandates,
where available, and with available information regarding
recurring incoming credit transfers and creditor-driven direct
debits made in the payment account of the consumer within the
previous 13 months;
2) transfer any positive balance remaining on the payment
account held by the consumer to the payment account opened or
held by the consumer with the new payment service provider, if
the request of the consumer includes full details allowing the
new payment service provider and the consumer's payment account
to be identified;
3) close the payment account held by the consumer.
(2) The payment service provider with which the consumer holds
a payment account shall carry out the activities referred to in
Paragraph one, Clauses 1, 2, and 3 of this Section on the date
specified by the consumer, which shall be at least six business
days after that payment service provider receives the consumer's
request if it does not have outstanding obligations arising from
the use of the payment account and if the parties have not agreed
otherwise. The payment service provider shall immediately inform
the consumer if outstanding obligations arising from the use of
the payment account prevent his payment account from being
closed.
(3) The payment service provider with which the consumer holds
a payment account shall carry out the activities referred to in
Paragraph one, Clauses 1 and 3 of this Section free of charge. If
the payment service provider provides the information referred to
in Paragraph one, Clause 1 of this Section in a language other
than the language of communication specified in the framework
contact, it is entitled to apply a fee for the preparation of
documents in another language.
[2 March 2017]
Chapter X
Rights and Obligations of Payment Service Providers and Payment
Service Users
Section 76. If the payment service user is not a
consumer, the payment service provider and the payment service
user may agree on non-application of individual provisions of
Section 77, Paragraph one, Section 80, Paragraph three, as well
as Sections 85, 87, 88, 89, 92, and 99 of this Law. The payment
service provider and the payment service user may agree on
another time period for requesting the compensation of losses
than that specified in Section 84 of this Law.
[2 March 2017]
Section 77. (1) The payment service provider may not
request a fee from the payment service user for the fulfilment of
its information obligations, as well as for the performance of
corrective or preventive activities in accordance with Chapters
X, XI, XII, XIII, and XIV of this Law, unless it has been
specified otherwise in Section 91, Paragraph two, Section 92,
Paragraph seven, and Section 98, Paragraph three of this Law. If
the payment service provider agrees with the payment service user
regarding application of the fee referred to in Section 91,
Paragraph two, Section 92, Paragraph seven, and Section 98,
Paragraph three of this Law, then such fee shall be determined
commensurately with its actual costs of information, as well as
performance of corrective or preventive activities.
(2) If the payment service provider of both the payer and the
payee is located in any of the Member States, the payee shall pay
the fee for the service requested by its payment service
provider, and the payer - the fee requested by its payment
service provider. This condition shall not apply to such steps of
the payment which are taken outside Member States.
(3) The payee is prohibited from requesting a fee from the
payer for the use of the particular payment instrument.
[20 June 2018]
Section 78. (1) If the payment service user is using a
payment instrument which, according to the framework contract,
solely concerns individual payments not exceeding EUR 30 or which
either have a spending limit of EUR 150 or store funds which do
not exceed EUR 150 at any time, the payment service provider may
agree with the payment service user that:
1) the provisions of Section 82, Paragraph one, Clause 2,
Section 83, Paragraph one, Clauses 3, 4, and 5, and Section 87,
Paragraphs four and five of this Law do not apply if the payment
instrument does not allow its blocking or prevention of its
further use;
2) the provisions of Sections 85, 86 and Section 87,
Paragraphs one and two of this Law do not apply if the payment
instrument is used anonymously or the payment service provider is
not in a position for other reasons which are intrinsic to the
payment instrument to prove that a payment was authorised;
3) the payment service provider is not required to notify the
payment service user of the refusal of a payment order, if the
non-execution of the payment order is apparent from the
context;
4) the payer may not revoke the payment order after
transmitting the payment order or giving consent to execute the
payment to the payee;
5) other payment execution periods than specified in Section
96 of this Law apply.
(2) The provisions of Sections 86 and 87 of this Law shall
also be applied in relation to electronic money, except when the
payment service provider of the payer cannot freeze the payment
account or block the payment instrument.
[24 April 2014; 20 June 2018]
Section 79. (1) The payment service provider of the
payer, the payment service provider of the payee, as well as
intermediaries of payment service providers shall transfer the
amount of payment and shall not deduct any fee for the service
from the transfer amount.
(2) The payer and its payment service provider may agree that
the payment service provider deducts a commission from the
transferred funds before transferring them into the account of
the payee. In such case the full amount of payment and the
collected fee for the service shall be indicated individually in
the information provided to the payee.
(3) If the payer has initiated a payment and fee other than
the fee for the service referred to in Paragraph two of this
Section has been deducted from the amount of payment, the payment
service provider of the payer shall ensure that the payee
receives all the amount of the payment initiated by the
payer.
(4) If the payee has initiated a payment or it has been
initiated with the intermediation of the payee and fee other than
the fee for the service referred to in Paragraph two of this
Section has been deducted from the amount of payment, the payment
service provider of the payee shall ensure that the payee
receives all the amount of the payment.
Chapter XI
Authorisation of Payments
Section 80. (1) The payer may give consent to making a
payment prior to or, if agreed between the payer and the payment
service provider, after the execution of the payment.
(2) Consent to make a payment, as well as a series of or
repeated payments shall be given in the form agreed between the
payer and the payment service provider. Consent to make a payment
may also be given with the intermediation of the payee or the
payment initiation service provider. In the absence of consent, a
payment shall be considered to be unauthorised.
(3) Consent may be withdrawn by the payer at any time, but no
later than at the moment specified in Section 92 of this Law.
Consent to execute a series of or repeated payments may also be
withdrawn by the payer. Any future payments made shall be
considered to be unauthorised.
[20 June 2018 / The new wording of Paragraph two
shall come into force on 1 October 2018. See Paragraph 35
of Transitional Provisions]
Section 80.1 (1) The payer has the right to
initiate a payment with the intermediation of a payment
initiation service provider from its payment account if it is
accessible online.
(2) If the payer gives explicit consent to the payment
initiation service provider for the execution of a payment in
accordance with Section 80 of this Law, the account servicing
payment service provider shall, upon carrying out the activities
specified in Paragraph four of this Section, provide the payer a
possibility to use the payment initiation service.
(3) The payment initiation service provider shall:
1) not hold at any time the payer's money in connection with
the provision of the payment initiation service;
2) forward the personalised security credentials of the payer,
using secure way of communication, in a way that precludes such
credentials becoming accessible to other persons than the payer
and the issuer of the personalised security credentials;
3) provide any other information regarding the payer, obtained
when providing payment initiation service, only to the payee and
only with the payment service user's explicit consent;
4) every time a payment is initiated, identify itself towards
the account servicing payment service provider of the payer, as
well as communicate with the account servicing payment service
provider, the payer, and the payee, using secure way of
communication;
5) not store sensitive payment data;
6) not request from the payer any data other than those
necessary to provide the payment initiation service;
7) not use, access, and store any data for purposes other than
for the provision of the payment initiation service as explicitly
requested by the payer;
8) not modify the amount of the payment, the payee or any
other feature of the payment.
(4) The account servicing payment service provider shall:
1) ensure secure way of communication for communication with
payment initiation service providers;
2) immediately after receipt of the payment order from a
payment initiation service provider, provide or make available
all information regarding the initiation of the payment and all
information accessible to the account servicing payment service
provider regarding the execution of the payment to the payment
initiation service provider;
3) treat payment orders submitted, using the services of a
payment initiation service provider, according to the same
conditions for the processing of payment orders (including
period, priority, and charges for execution of orders) as for
payment orders which have been transmitted by the same payer
directly to the account servicing payment service provider,
except when there are objective reasons for different
processing.
(5) The course of initiation or execution of a payment shall
not be dependent on the existence of a contractual relationship
between the account servicing payment service provider and the
payment initiation service provider.
[20 June 2018]
Section 80.2 (1) The payment service user
has the right to receive the account information service
regarding its payment account if they are available online.
(2) The account information service provider shall:
1) provide the account information only after receipt of
explicit consent from the payment service user for the receipt of
such service;
2) forward the personalised security credentials of the
payment service user, using secure way of communication, in a way
that precludes such personalised credentials becoming accessible
to other persons than the payment service user and the issuer of
the security credentials;
3) for each communication session, identify itself towards the
account servicing payment service provider, as well as
communicate with the payment service user, using secure way of
communication;
4) access only the information from designated payment
accounts and associated payment transactions of the payment
service user;
5) not request sensitive payment data linked to the payment
accounts;
6) not use, access, and store any data for purposes other than
for performing the account information service explicitly
requested by the payer, complying with the laws and regulations
regarding personal data protection in its operation.
(3) In relation to payment accounts, the account servicing
payment service provider shall:
1) ensure secure way of communication for communication with
account information service providers;
2) treat data requests transmitted with the intermediation of
an account information service provider according to the same
conditions as a request expressed directly by the payment service
user, except when there are objective reasons for different
processing.
(4) The course of provision of an account information service
shall not be dependent on the existence of a contractual
relationship between the account servicing payment service
provider and the account information service provider.
[20 June 2018]
Section 81. (1) If a specific payment instrument is
used for authorisation, the payer may agree with the payment
service provider on the limit of use of the payment
instrument.
(2) If the payment service provider and the payment service
user have agreed thereon in the framework contract, the payment
service provider has the right to block the use of the payment
instrument in cases which are related to security of the payment
instrument, justified suspicions regarding unauthorised or
fraudulent use of the payment instrument, or in cases of a
payment instrument with a credit line and a significantly
increased risk that the payer may be unable to fulfil his
liability to pay.
(3) In the cases referred to in Paragraph two of this Section
the payment service provider shall inform the payer, in the
manner agreed upon thereby with the payment service user,
regarding the blocking of the payment instrument and the reasons
for it, where possible, before the payment instrument is blocked
and at the latest immediately thereafter, except when giving such
information would compromise objectively justified security
reasons or is prohibited in accordance with the requirements of
the laws and regulations of Latvia.
(4) The payment service provider shall unblock the payment
instrument or replace it with a new payment instrument once the
reasons for blocking ceases to exist.
(5) The account servicing payment service provider has the
right to block access of the payment initiation service provider
or account information service provider to the account due to
such objectively justified reasons which are related to
unauthorised or fraudulent access of the providers of such
services to the payment account.
(6) In the cases referred to in Paragraph five of this Section
the account servicing payment service provider shall inform the
payment service user, in the manner agreed upon thereby with the
payment service user, regarding the prohibition to access the
payment account and the reasons for it, where possible, before
access is denied and at the latest immediately thereafter, except
when giving such information would compromise objectively
justified security reasons or is prohibited in accordance with
the requirements of the laws and regulations of Latvia or
directly applicable legal acts of the European Union.
(7) As soon as the reasons referred to in Paragraph five of
this Section cease to exist, the account servicing payment
service provider shall renew access to the payment account.
(8) The account servicing payment service provider shall,
without delay, notify Latvijas Banka of the cases when it has
blocked access of the account information service provider or
payment initiation service provider to the payment account in
accordance with Paragraph five of this Section, and shall
indicate the reasons for prohibiting access in its report.
[20 June 2018; 23 September 2021 / Amendment
regarding the replacement of the word "the Commission" with the
words "Latvijas Banka" shall come into force on 1 January
2023. See Paragraph 41 of Transitional Provisions]
Section 81.1 (1) The account servicing
payment service provider shall, upon a request of the payment
service provider issuing card-based payment instruments,
immediately confirm whether an amount necessary for the execution
of a card-based payment is available on the payment account of
the payer, provided that all of the following conditions are
met:
1) the payment account of the payer is accessible online at
the time of the request;
2) the payer has given explicit consent to the account
servicing payment service provider to respond to requests from a
specific payment service provider to confirm that the amount
corresponding to a certain card-based payment instrument is
available on the payment account of the payer;
3) the consent referred to in Clause 2 of this Paragraph has
been given before the first request for confirmation is made.
(2) The payment service provider may request the confirmation
referred to in Paragraph one of this Section where all of the
following conditions are met:
1) the payer has given explicit consent to the payment service
provider to request the confirmation referred to in Paragraph one
of this Section;
2) the payer has initiated the card-based payment for the
amount in question using a card based payment instrument issued
by the payment service provider;
3) the payment service provider authenticates itself in the
system of the account servicing payment service provider before
each confirmation request, and communicates with the account
servicing payment service provider, conforming to the secure
communication standards specified in accordance with Commission
Delegated Regulation (EU) 2018/389 of 27 November 2017
supplementing Directive (EU) 2015/2366 of the European Parliament
and of the Council with regard to regulatory technical standards
for strong customer authentication and common and secure open
standards of communication (Text with EEA relevance) (hereinafter
- Regulation No 2018/389).
(3) The account servicing payment service provider shall
provide the confirmation referred to in Paragraph one of this
Section only in the form of confirmation or denial, conforming
the laws and regulations regarding personal data protection in
its operation. The payment service provider which has issued a
card-based payment instrument shall not store the answer and use
it for purposes other than for the execution of the particular
payment using a card-based payment instrument.
(4) The confirmation given by the account servicing payment
service provider referred to in Paragraph one of this Section
shall result neither in obligation nor the right to block the
money in the payment account of the payer. The payment service
provider which has issued a card-cased payment instrument shall
be responsible for the execution of the payment using a
card-based payment instrument.
(5) The payer has the right to request the account servicing
payment service provider to inform, each time, the payer of the
payment service provider which has requested a confirmation and
the answer provided thereto in accordance with Paragraph three of
this Section.
(6) This Section shall not be applied if electronic money is
stored in the card-based payment instrument.
[20 June 2018]
Section 82. (1) The payment service user entitled to
use a payment instrument shall have the following
obligations:
1) to use the payment instrument in accordance with the terms
governing the issue and use of the payment instrument and which
are objective, commensurate, and non-discriminating;
2) to notify the payment service provider, or the institution
specified by the latter, without undue delay of becoming aware of
the loss, theft, or misappropriation of the payment instrument or
of its unauthorised use.
(2) The payment service user shall take all the necessary
measures to keep its personalised authentication features of the
payment instrument safe.
[20 June 2018]
Section 83. (1) The payment service provider issuing a
payment instrument shall comply with the following
requirements:
1) make sure that the personalised authentication features of
the payment instrument are not accessible to persons who are not
entitled to use the payment instrument;
2) refrain from sending an unsolicited payment instrument to
the payment service user, except for the case where a payment
instrument already given to the payment service user is to be
replaced with a new payment instrument;
3) continuously ensure the payment service user with a
possibility to notify, free of charge, of the cases referred to
in Section 82, Paragraph one, Clause 2 of this Law or request
unblocking of the payment instrument in accordance with Section
81, Paragraph four of this Law;
4) ensure proof that the payment service user has provided the
relevant notification, for 18 months from the moment when the
payment service user has informed the payment service provider of
the cases referred to in Section 82, Paragraph one, Clause 2 of
this Law or has requested unblocking of the payment instrument in
accordance with Section 81, Paragraph four of this Law;
5) prevent the use of the payment instrument once the
information referred to in Section 82, Paragraph one, Clause 2 of
this Law has been received;
6) in the cases referred to in Section 82, Paragraph one,
Clause 2 of this Law replace the payment instrument free of
charge or for a fee which conforms to the replacement costs.
(2) The payment service provider shall bear the risk which is
related to the sending of a payment instrument or any security
elements thereof to the payer, except when, upon a request of the
payment service user, the payment service provider and the
payment service user have agreed upon otherwise before.
[20 June 2018]
Section 84. (1) The payment service user is entitled to
receive a compensation for losses from the payment service
provider in accordance with Sections 86 and 99 of this Law if the
payment service user has informed the payment service provider
thereof without undue delay of becoming aware of any unauthorised
or incorrectly executed payment, but not later than within 13
months after writing off of the funds from the account.
(2) If the payment service provider has not provided or made
available information regarding the payment in accordance with
the provisions of Chapters VII, VIII, and IX of this Law, the
payment service user may receive the compensation referred to in
Paragraph one of this Section in accordance with Sections 86 and
99 of this Law if it has informed the payment service provider as
soon as it become aware of any unauthorised or incorrectly
executed payment.
(3) If the service of the payment initiation service provider
was used in the execution of an unauthorised or incorrectly
executed payment, the payer is entitled to receive a compensation
for losses from its account servicing payment service provider in
accordance with Sections 86 and 99 of this Law, in conformity
with that laid down in Paragraph one of this Section.
[20 June 2018 / Paragraph three shall come into
force on 1 October 2018. See Paragraph 35 of Transitional
Provisions]
Section 85. (1) If the payment service user denies
having authorised an executed payment or claims that the payment
was not correctly executed, the payment service provider has an
obligation to prove that the payment was authenticated,
accurately recorded, and entered in the accounts and not affected
by a technical breakdown or some other deficiency of the services
provided by the payment service provider.
(11) If the payment is initiated with the
intermediation of the payment initiation service provider, the
payment initiation service provider has an obligation to prove
that, in the payment step in which it was involved, the payment
was authenticated, accurately recorded, and entered in the
accounts and not affected by a technical breakdown or some other
deficiency related to the relevant payment service provided
thereby.
(2) If the payment service user denies having authorised an
executed payment, the use of a payment instrument recorded by the
payment service provider, including the payment initiation
service provider, shall in itself not necessarily be sufficient
to prove either that the payment was authorised by the payer or
that the payer acted fraudulently or failed with intent or gross
negligence to fulfil one or more of his obligations specified in
Section 82 of this Law.
(3) The payment service provider has an obligation to prove
that the payment service user has acted fraudulently or failed
with intent or gross negligence. In the case referred to in
Paragraph 1.1 of this Section the payment initiation
service provider shall provide the collected evidence also to the
account servicing payment service provider.
[20 June 2018]
Section 86. (1) In the cases referred to in Section 84
of this Law, the payment service provider of the payer shall,
without delay, but not later than by the end of the following
business day, compensate losses to the payer by refunding the
amount of the unauthorised payment or restoring the payment
account of the payer from the state from which such amount was
written off to such state as was before the execution of the
unauthorised payment, except when the payment service provider
has justified suspicions that the payment service user has acted
unlawfully, and the former has notified Latvijas Banka of such
suspicions.
(11) In the cases referred to in Section 84 of this
Law, if the payment has been initiated by the payment initiation
service provider, the account servicing payment service provider
shall, without delay, but not later than by the end of the
following business day, compensate losses to the payer by
refunding the amount of the unauthorised payment or restoring the
payment account of the payer from the state from which such
amount was written off to such state as was before the execution
of the unauthorised payment.
(12) If the payment initiation service provider is
responsible for the unauthorised payment, it shall, upon request
of the account servicing payment service provider, compensate all
the losses incurred thereby or the amounts refunded to the payer,
including the amount of the unauthorised payment, without delay.
The payment initiation service provider has an obligation to
prove that, in the payment step in which it was involved, the
payment was authenticated, accurately recorded, and entered in
the accounts and not affected by a technical breakdown or some
other deficiency related to the relevant payment service provided
thereby.
(2) Additional compensation of losses may be specified in
accordance with the laws and regulations applying to the
contracts between the payer and the payment service provider.
[20 June 2018; 23 September 2021 / Amendment
regarding the replacement of the word "the Commission" with the
words "Latvijas Banka" shall come into force on 1 January
2023. See Paragraph 41 of Transitional Provisions]
Section 87. (1) A payment service provider shall not
compensate losses to the payer up to EUR 50 if they have arisen
in relation to unauthorised payments due to loss, theft, or other
illegal misappropriation of the payment instrument.
(11) Paragraph one of this Section shall not be
applied in the following cases:
1) it was not possible for the payer to establish the loss,
theft, or misappropriation of the payment instrument before the
payment, except when the payer itself had acted unlawfully;
2) the payer has incurred losses due to the activity or
failure to act of an employee, representative, or branch of the
payment service provider or the outsourcing service provider.
(2) The payment service provider shall not compensate such
losses to the payer which have been incurred thereby in relation
to unauthorised payment if the payer has acted fraudulently or
failed with intent or gross negligence (including has not
fulfilled one or several of the obligations specified in Section
82 of this Law).
(3) [20 June 2018 / See Paragraph 35 of Transitional
Provisions]
(31) If the payment service provider does not
request the strong authentication, the payer shall not cover the
losses unless it has acted unlawfully. If the payee or the
payment service provider of the payee does not accept the strong
authentication, it shall cover the losses caused to the payment
service provider of the payer.
(4) Without prejudice to the provisions of Paragraph one of
this Section, the payment service provider shall compensate the
losses to the payer which have arisen as a result of the use of a
lost, stolen, or otherwise misappropriated payment instrument
after the payer had provided information to the payment service
provider or the institution indicated thereby in accordance with
Section 82, Paragraph one, Clause 2 of this Law, except when the
payer itself has acted unlawfully.
(5) If the payment service provider does provide a possibility
for the payer to inform of the loss, theft, or other
misappropriation of the payment instrument at any time in
accordance with Section 83, Paragraph one, Clause 3 of this Law,
the payment service provider shall, without prejudice to the
provisions of Paragraph one of this Section, compensate the
losses incurred by the payer as a result of the use of the
payment instrument, except when the payer itself has acted
unlawfully.
(6) The amount of the responsibility of the payer specified in
Paragraph one of this Section shall not be applied in relation to
the payer - consumer if losses have arisen in relation to
unauthorised payment due to the theft or other misappropriation
of its payment card.
[12 May 2011; 2 March 2017; 20 June 2019 /
Amendments to Paragraphs one, 1.1, and
3.1 shall come into force on 1 October 2018.
See Paragraph 35 of Transitional Provisions]
Section 87.1 (1) If a payment is initiated
by or through the payee and the exact amount of the payment is
not known at the moment when the payer gives consent to execute
the payment, the payment service provider of the payer may block
funds on the payment account of the payer only if the payer has
given consent to the exact amount of the funds to be blocked.
(2) The payment service provider of the payer shall release
the funds blocked on the payment account of the payer in
accordance with Paragraph one of this Section without undue delay
after receipt of the information regarding the exact amount of
the payment and at the latest immediately after receipt of the
payment order.
[20 June 2018 / Section shall come into force on 1
October 2018. See Paragraph 35 of Transitional
Provisions]
Section 88. (1) The payer has the right to a refund
from the payment service provider of an authorised payment which
has already been executed in full amount, if the relevant payment
has been initiated by or through a payee and if:
1) upon authorising the payment, the exact amount of the
payment was not specified;
2) the amount of the payment exceeded the amount the payer
could reasonably have expected for the relevant payment, taking
into account the previous spending pattern, the conditions in the
framework contract, as well as relevant circumstances of the
case.
(2) Upon a request of the payment service provider, the payer
shall bear the burden of proving the conditions referred to in
Paragraph one of this Section are met.
(21) The value date for the transfer of the funds
into the payment account of the payer may be no later than the
business day the amount was debited.
(3) [20 June 2018]
(4) The payer may not justify the fulfilment of the condition
referred to in Paragraph one, Clause 2 of this Section with
currency exchange reasons if the exchange rate agreed thereby
with its payment service provider in accordance with Section 64,
Clause 3, Sub-clause "b" and Section 73, Paragraph one, Clause 4
of this Law was applied.
(41) If the payment was initiated by the payee,
executing a direct debit in accordance with that specified in
Article 1 of Regulation (EU) No 260/2012 of the European
Parliament and of the Council of 14 March 2012 establishing
technical and business requirements for credit transfers and
direct debits in euro and amending Regulation (EC) No 924/2009
(Text with EEA relevance), the payer has the right to refund in
euro currency within the time periods specified in Section 89 of
this Law.
(5) It may be agreed in a framework contract between the payer
and the payment service provider that the payer has no right to a
refund where:
1) the payer has given consent to execute the payment directly
to its payment service provider;
2) information regarding the future payment was provided or
made available by the payment service provider or by the payee in
an agreed manner to the payer for at least four weeks before the
date when the payer had an obligation to fulfil the liabilities
in relation to the payee.
[20 June 2018 / Paragraphs 2.1 and
4.1 shall come into force on 1 October 2018.
See Paragraph 35 of Transitional Provisions]
Section 89. (1) The payer can request the refund
referred to in Section 88 of this Law of an authorised payment
initiated by or through a payee for a period of eight weeks from
the date on which the funds were debited.
(2) Within ten business days of receiving a request for a
refund, the payment service provider shall either refund the full
amount of the payment or provide a justification for refusing the
refund, indicating the institutions to which the payer may refer
the matter in accordance with Sections 105 and 106 of this
Law.
(3) [20 June 2018 / See Paragraph 35 of Transitional
Provisions]
[20 June 2018]
Chapter XII
Payment Order
Section 90. (1) The time of receipt of the payment
order is the time when the payment order submitted by the payer,
payee, or through a payee is received by the payment service
provider of the payer.
(2) If the payment order is received after the end of the
business day of the payment service provider of the payer, it
shall be deemed to have been received on the following business
day.
(3) The payment service provider may establish the time when
the acceptance of payment orders is discontinued. Such time may
be established near the end of a business day, and any payment
orders received after that time shall be deemed to have been
received on the following business day.
(4) If the payment service user submitting a payment order and
the payment service provider agree that execution of the payment
order shall start on a specific day or at the end of a certain
period or on the day on which the payer has put money at the
disposal of the payment service provider, the time of receipt of
the payment order is deemed to be the agreed day.
(5) If the agreed day is not a business day for the payment
service provider, the payment order received shall be deemed to
have been received on the following business day.
Section 91. (1) If the payment service provider refuses
to execute a payment order or to initiate a payment, it shall, at
the earliest opportunity, but not later than within the time
period provided for in Section 94 of this Law, and in the manner
previously agreed upon, provide or make available information to
the payment service user regarding the refusal and the reasons
for it, as well as the procedure for correcting any mistakes that
led to the refusal, unless the prohibition of such information is
specified in the laws and regulations of Latvia.
(2) The framework contract may include a provision that the
payment service provider charges a reasonable fee for the
information referred to in Paragraph one of this Section if the
refusal is objectively justified.
(3) If all of the provisions set out in the framework contract
of the payer and the payment service provider are met, the
payment service provider may not refuse to execute an authorised
payment order irrespective of whether the payment order is
submitted by a payer, including through a payment initiation
service provider, or by or through a payee, unless execution of
the payment is prohibited by legal acts.
(4) Within the meaning of Sections 94 and 99 of this Law, a
payment order the execution of which has been refused shall be
deemed not to have been received.
[20 June 2018]
Section 92. (1) The payment service user may not revoke
a payment order once it has been received by the payment service
provider of the payer, unless otherwise specified in this
Section.
(2) If the payment is initiated through a payee or payment
initiation service provider, the payer may not revoke the payment
order after submitting it to the payee or payment initiation
service provider.
(3) If the payment is initiated by the payee, the payer may
not revoke the payment order after giving consent to initiate the
payment to the payee.
(4) In the case of a direct debit and in addition to the
rights specified in Section 88, Paragraph 4.1 of this
Law, the payer may revoke the payment order by the end of the
business day preceding the day agreed for writing off the money
from the account.
(5) In the case referred to in Section 90, Paragraph four of
this Law the payment service user may revoke a payment order at
the latest by the end of the business day preceding the day
agreed for writing off the funds from the account.
(6) After expiry of the time limits specified in Paragraphs
one, two, three, four, and five of this Section, the payment
order may be revoked only if the payment service user and the
payment service provider have agreed on such possibility. In the
cases referred to in Paragraphs two, three, and four of this
Section, the payee's agreement shall also be required to revoke
the order.
(7) The payment service provider may collect a fee for the
revocation of a payment order, if such possibility is provided
for in the framework contract.
(8) This Section shall not be applied in the cases referred to
in Section 78, Clause 4 of this Law.
[20 June 2018 / The new wording of Paragraph four
shall come into force on 1 October 2018. See Paragraph 35
of Transitional Provisions]
Section 92.1 [23 November 2016]
Chapter XIII
Execution Time and Value Date of the Payment
Section 93. (1) This Chapter shall apply to:
1) payments in euro;
2) [12 September 2013];
3) payments involving only one currency exchange between the
euro and the national currency of a Member State. If the required
currency exchange is carried out in a Member State, the payment
service shall be provided in the national currency of this Member
State, but in the case of a cross-border payment - in euro.
(2) This Chapter shall apply to other payments, unless
otherwise agreed between the payment service user and the payment
service provider. The payment service provider and the payment
service user are not be permitted to agree on the non-application
of the provisions of Section 97 of this Law. The payment service
user and its payment service provider may agree on a longer
period than that specified in Section 94 of this Law. If the
payment service provider of both the payer and the payee is
located in a Member State, the payment term may not exceed four
business days following the time of receipt of the payment order
specified in Section 90 of this Law.
[12 September 2013]
Section 94. (1) The payment service provider of the
payer shall ensure that after receipt of the payment order in
accordance with Section 90 of this Law the amount of the payment
is credited to the account of the payment service provider of the
payee not later than by the end of the following business
day.
(2) When the payment service provider of the payee has
received the amount of the payment, it shall determine the value
date and make available the amount of the payment to the payment
account of the payee in accordance with Section 97 of this
Law.
(3) The payment service provider of the payee shall transmit a
payment order submitted by or through the payee to the payment
service provider of the payee within the time limits agreed
between the payee and the payment service provider in order to
enable settlement in relation to direct debit is concerned on the
date when the payer has obligation to fulfil its liabilities in
relation to the payee according to the agreement.
(4) This Section shall not be applied in the cases referred to
in Section 78 of this Law.
Section 95. (1) If the payee does not have a payment
account in the institution of the payment service provider, the
payment service provider which has received the money intended
for the payee shall make them available to the payee within the
time period specified in Section 94 of this Law.
(2) This Section shall not be applied in the cases referred to
in Section 78 of this Law.
Section 96. If a consumer places cash on a payment
account opened in the institution of the payment service provider
in the currency of that payment account, the payment service
provider shall ensure that the amount is made available
immediately after receipt of the money and it is value dated with
the date of the same business day or the following business day,
if the day of placement is not a business day for the payment
service provider. If the payment service user is not a consumer,
the payment service provider shall ensure that the amount of the
money is made available and value dated at the latest on the
following business day after receipt of the funds.
[20 June 2018]
Section 97. (1) The value date for the transfer of the
funds into the payment account of the payee may be no later than
the business day when the amount of the payment was credited into
the account of the payment service provider of the payee. The
payment service provider of the payee shall ensure that the
amount of the payment is at the disposal of the payee immediately
after that amount is credited to the account of the payment
service provider of the payee if the payment service provider of
the payee:
1) has not performed currency exchange;
2) has performed currency exchange between the euro and the
national currency of a Member State or between two national
currencies of Member States.
(2) The value date for writing off of the funds from the
payment account of the payer is no earlier than the time at which
the amount of the payment is written off that payment
account.
(3) The provisions of Paragraphs one and two of this Law shall
also apply to payment service providers which provide payment
services in Latvia, if the payment service provider of the payer
or payee is located in the Member State and if the payment
service is provided in euro or national currency of any Member
State.
[20 June 2018]
Chapter
XIII.1
Basic Account of the Consumer
[2 March 2017]
Section 97.1 This Chapter shall apply to
credit institutions which provide services linked to a payment
account in Latvia to residents of the European Union - consumers
- and determine the procedures by which credit institutions shall
offer a resident of the European Union to open and use a basic
account.
[2 March 2017]
Section 97.2 (1) The credit institution
referred to in Section 97.1 of this Law has an
obligation to offer also a basic account in accordance with the
procedures and within the amount laid down in this Chapter.
(2) A consumer who is a resident of the European Union, also a
person who does not have a residence permit, however, whose
removal from Latvia in accordance with the laws and regulations
of the Republic of Latvia is not possible, has the right to open
and use a basic account in credit institutions which conduct and
offer commercial activity in Latvia, unless such rights are
restricted in accordance with that laid down in this Law or other
laws and regulations.
(3) A credit institution shall offer a basic account without
such additional conditions as receipt of additional services or
purchase of stocks of the credit institution, unless the
condition of purchasing the stocks of the credit institution is
applicable to all customers of the credit institution.
(4) A consumer who wishes to open a basic account shall submit
an application to the credit institution. The following shall be
appended to the application:
1) a signed declaration that he or she has not opened a
payment account in order to ensure the services referred to in
Paragraph 97.3 of this Law, in another credit
institution providing payment services in Latvia;
2) another information requested by the credit institution
which is necessary for the opening of the basic account.
(5) The credit institution shall, within 10 business days
after receipt of all the information referred to in Paragraph
four of this Section, open a basic account for the consumer or
refuse to open the basic account.
(6) The credit institution shall refuse the opening of a basic
account in any of the following cases:
1) as a result of opening or operating of such account the
requirements of the laws and regulations would be violated,
including in the field of prevention of money laundering and
terrorism and proliferation financing;
2) the consumer has provided false information for the opening
of the basic account.
(7) The credit institution is entitled to refuse the opening
of a basic account in any of the following cases:
1) the consumer already has an open payment account in this or
another credit institution which is conducting commercial
activity in Latvia and is providing the services referred to in
Paragraph 97.3 of this Law, except when the consumer
has already received a notification that the payment account will
be closed;
2) the consumer does not conform to that specified in
Paragraph two of this Section anymore;
3) [9 November 2023].
(8) After the credit institution has decided to refuse the
opening of a basic account, it shall, without delay in writing
and free of charge, inform the consumer of the refusal, as well
as of its reasons, except when the disclosure of such information
is in contradiction with the national security or public order
interests (including the requirements of the laws and regulations
in the field of prevention of money laundering and terrorism and
proliferation financing). The credit institution shall use the
address provided for communication (including electronic mail
address) indicated in the application for communication with the
applicant.
(9) In case of refusal, the credit institution shall inform
the consumer of the procedures for the examination of complaints
and the procedures for out-of-court handling of disputes in
accordance with Sections 105 and 106 of this Law, indicating the
relevant contact details.
[2 March 2017; 17 June 2020; 9 November 2023]
Section 97.3 (1) A basic account shall
include the following services:
1) all the operations required for the opening, operating, and
closing of a payment account;
2) funds to be placed in a payment account;
3) cash withdrawals from a payment account at the counter or
at automated teller machines during or outside the opening hours
of the credit institution;
4) a possibility for the execution of the following payment
services:
a) execution of credit transfers, inter alia regular payments,
including submission of the relevant standing orders in person or
using the online system of the credit institution if the account
of the payee is opened with a payment service provider in Latvia
or a Member State;
b) execution of payments through a payment card, including
online payments;
c) execution of direct debits if the account of the payee is
opened with a payment service provider in Latvia or a Member
State.
(2) The services referred to in Paragraph one of this Section
shall be offered by the credit institution to the extent and
range that it already offers and provides them to its customers -
consumers holding payment accounts of other kind in the credit
institution.
(3) The credit institution shall provide the consumer a
possibility to initiate, amend, or revoke payments from the basic
account at the counter of the credit institution or using the
possibilities of online services if offered by the credit
institution.
(4) The credit institution is entitled to agree with the
consumer on opening and operating of the basic account in a
currency other than euro.
(5) The credit institution shall ensure unlimited number of
the services referred to in Paragraph one of this Section to the
consumer within the scope of the basic account unless other laws
and regulations provide for restrictions in number.
(6) The services referred to in Paragraph one of this Section,
except for payments with a credit card, shall be offered by the
credit institution free of charge or for a reasonable fee which
conforms to the conditions of Section 97.4 of this
Law.
(7) In relation to the services referred to in Paragraph one,
Clause 4, Sub-clauses "a" and "c" of this Section, Latvijas Banka
is entitled to specify a restriction on the number of
transactions in the case of exceeding which the credit
institution is entitled to apply a fee in addition to the fee
referred to in Paragraph six of this Section. Such additional fee
together with the fee referred to in Paragraph six of this
Section may not exceed the fee which is usually applied by the
credit institution in case of exceeding such restrictions within
the scope of payment accounts of another kind.
(8) The restrictions on fee specified for a credit institution
in Paragraph six of this Section shall not apply to such
additional fees applied by the credit institution to the consumer
which are determined by the business partners of the credit
institution, if the payment services referred to in Paragraph one
of this Section are provided with their intermediation.
[2 March 2017; 23 September 2021 / Amendment
regarding the replacement of the word "the Commission" with the
words "Latvijas Banka" shall come into force on 1 January
2023. See Paragraph 41 of Transitional Provisions]
Section 97.4 (1) The fee specified by a
credit institution for a basic account and the services included
therein shall be commensurate with the type and extent of the
services provided.
(2) The credit institution shall determine the contractual
penalties applicable to consumers for the failure to comply with
the liabilities, taking into account the restrictions specified
in the Consumer Rights Protection Law and The Civil Law.
(3) Upon specifying the fee for operating a basic account and
the services included therein, the credit institution shall take
into account both of the following conditions:
1) it may not exceed the standard fee for the services linked
to a payment account which is applied to customers - natural
persons - of the credit institution;
2) it may not exceed the average fee applied by the credit
institution in Latvia to consumers for the services linked to a
payment account by more than 25 per cent, unless such exceeding
is related to covering the cost price of the relevant
services.
(4) The association Finance Latvia Association shall, once a
quarter, compile and publish information on its website regarding
the average fee of credit institutions for the services linked to
a payment account. In relation to the carrying out of the
delegated State administration task referred to in this
Paragraph, the association "Latvijas Finanšu nozares asociācija"
shall be in functional subordination of Latvijas Banka,
implementing such subordination in the form of monitoring. Credit
institutions have an obligation, upon a request of the
association "Latvijas Finanšu nozares asociācija" and within the
time period stipulated thereby, to provide information regarding
the fee applied to consumers for services linked to a payment
account.
[2 March 2017; 3 April 2019; 23 September 2021; 9 November
2023]
Section 97.5 (1) A credit institution, upon
concluding a framework contract with a consumer for the opening
of a basic account, shall comply with the provisions of Chapter
VIII of this Law.
(2) The credit institution shall unilaterally terminate the
framework contract in any of the following cases:
1) further operating of the payment account is in
contradiction with the requirements of the laws and regulations,
including in the field of prevention of money laundering and
terrorism and proliferation financing;
2) the consumer has intentionally used the payment account for
unlawful activities.
(3) The credit institution is entitled to unilaterally
terminate the framework contract in any of the following
cases:
1) there has been no transaction on the payment account for
more than 24 consecutive months;
2) the consumer has provided false information and the basic
account was opened on the basis of such information;
3) the consumer does not conform to that specified in Section
97.2, Paragraph two of this Law anymore;
4) the consumer has opened another payment account which
allows him or her to use the services referred to in Section
97.3 of this Law in Latvia;
5) [9 November 2023];
6) the credit institution terminates the provision of the
relevant payment service to all its customers - consumers;
7) the debt liabilities of the consumer for the use of the
basic account and the services provided within the framework
thereof exceed the balance of the basic account within not less
than six months.
(4) The credit institution shall, without delay, terminate the
framework contract for the basic account in the cases referred to
in Paragraph two of this Section, informing the consumer of the
termination and its grounds, except when the disclosure of such
information would be in contradiction with the national security
or public order interests (including the requirements of the laws
and regulations in the field of prevention of money laundering
and terrorism and proliferation financing).
(5) In the cases referred to in Paragraph three of this
Section, the credit institution shall terminate the framework
contract for the basic account, in conformity with the provisions
of Section 63, Paragraph one and Section 67, Paragraph four of
this Law and information regarding the termination and its
grounds at least two months in advance, except when the
disclosure of such information would be in contradiction with the
national security or public order interests.
(6) If the credit institution has an obligation, in accordance
with Paragraphs four and five of this Section, to inform the
consumer of the termination of the framework contract, it shall
indicate the procedures for the submission of complaints, the
procedures for appeal, and the procedures for out-of-court
handling of disputes which the consumer is entitled to use in
accordance with Sections 105 and 106 of this Law, as well as its
contact details in such notification.
[2 March 2017; 17 June 2020; 9 November 2023]
Section 97.6 The credit institution shall,
without additional fee, ensure information to the consumer
regarding the basic account and the conditions for its use by
providing such information in comprehensible form and placing in
a visible place at its branches and on its website. The credit
institution shall include a clear indication in the
abovementioned information that purchase of additional services
is not mandatory to access the basic account.
[2 March 2017; 23 September 2021]
Chapter XIV
Liability of Payment Service Providers and Electronic Money
Issuers
[17 March 2011]
Section 98. (1) A payment order is considered to be
executed correctly, if it is executed according to the unique
identifier indicated therein.
(2) If the payment service user has indicated an incorrect
identifier, the payment service provider is not liable in
accordance with Section 99 of this Law for the failure to execute
or incorrect execution of the payment.
(3) The payment service provider of the payer shall try to
recover the money for the failure to execute or defective payment
referred to in Paragraph two of this Section. The payment service
provider may deduct a fee from the service user for the recovery
of the money if it is provided for in the framework contract.
(31) In the case referred to in Paragraph three of
this Section, the payment service provider of the payee shall
transfer to the payment service provider of the payee all the
essential information which is necessary for the recovery of
money.
(32) If the money cannot be recovered in accordance
with Paragraph 3.1, the payment service provider of
the payer shall provide to the payer all the information which is
available thereto and is of the essence to the payer for it to
able to bring an action before the court regarding recovery of
such money.
(4) If the payment service user provides information in
addition to such information which has been requested in
accordance with Section 73, Paragraph one, Clause 1 or Section
64, Clause 2, Sub-clause "c" of this Law, the payment service
provider shall be liable only for the execution of the payment
according to the unique identifier indicated by the payment
user.
[20 June 2018]
Section 99. (1) If the payment order has been submitted
by the payer, its payment service provider shall be liable to the
payer for correct execution of the payment, unless it can prove
to the payer and, where relevant, to the payment service provider
of the payee that the payment service provider of the payee
received the amount of the payment in accordance with Section 94,
Paragraph one of this Law. If the payment service provider of the
payer can prove that the payment service provider of the payee
received the amount of the payment, the payment service provider
of the payee shall be liable for the correct execution of the
payment.
(2) If the payment service provider of the payer is liable for
the execution of the payment in accordance with Paragraph one of
this Law, it shall, without delay, refund to the payer the amount
of the non-executed or defective payment or restore the payment
account of the payer to the state in which it would have been had
the defective payment not taken place.
(3) If the payment service provider of the payee is liable for
the execution of the payment in accordance with Paragraph one of
this Law, it shall, without delay, place the amount of the
payment at the disposal of the payee or transfer the
corresponding amount to the payment account of the payee.
(31) If a payment is executed late, the payment
service provider of the payee shall, upon a request of the
payment service provider of the payer, determine the value date
of the amount of the payment transferred to the payment account
of the payee as not later as it would have been in case of the
correct execution of the payment.
(4) In the case of a non-executed or defectively executed
payment, where the payment order is submitted by the payer, his
or her payment service provider shall, regardless of liability
provided for in this Section, upon a request, make immediate
efforts to trace the payment and inform the payer of the
outcome.
(5) If a payment order is submitted by or through the payee,
the payment service provider of the payee shall be liable to the
payee for the correct transmission of the payment order to the
payment service provider of the payer in accordance with Section
94, Paragraph three of this Law.
(6) If the payment service provider of the payee is liable for
the transmission of the payment order in accordance with
Paragraph five of this Section, it shall, without delay,
re-transmit the relevant payment order to the payment service
provider of the payer upon a request of the payee. In the case of
a late transmission of the payment order, the amount of the
payment transferred to the payment account of the payee shall be
value dated no later than the date as it would have been in case
of the correct execution of the payment.
(7) The payment service provider of the payee shall be liable
to the payee for handling the payment transaction in accordance
with Section 97 of this Law.
(8) If the payment service provider of the payee is liable in
accordance with Paragraph seven of this Section, it shall make
available the amount of the payment to the payee immediately
after that amount is transferred to the account of the payment
service provider of the payee.
(9) In the case of a non-executed or defectively executed
payment for which the payment service provider of the payer is
not liable in accordance with this Section, the payment service
provider of the payer shall be liable to the payer.
(10) If the payment service provider of the payer is liable in
accordance with Paragraph nine of this Law, it shall, without
delay, refund to the payer the amount of the non-executed or
defective payment or restore the payment account of the payer to
the state in which it would have been had the defective payment
not taken place.
(101) The obligation specified in Paragraphs nine
and ten of this Section shall not apply to the payment service
provider of the payer if the payment service provider of the
payer proves that the payment service provider of the payee has
received the payment, even if execution of payment is merely
delayed. The amount of the payment transferred to the payment
account of the payee shall be value dated no later than the date
as it would have been in case of the correct execution of the
payment.
(11) In the case of a non-executed or defectively executed
payment where the payment order is submitted by or through the
payee, the payment service provider of the payee shall,
regardless of liability, upon request, make efforts to trace the
payment and notify the payee of the outcome.
(12) Payment service providers shall cover the costs incurred
due to a non-executed or defectively executed payment, including
a delayed payment.
[20 June 2018 / Paragraphs 3.1 and
10.1, as well as amendments to Paragraphs six and
twelve shall come into force on 1 October 2018. See
Paragraph 35 of Transitional Provisions]
Section 99.1 (1) If a payment order is
submitted by the payer through a payment initiation service
provider, the account servicing payment service provider shall
refund to the payer the amount of the non-executed or defective
payment and, where applicable, restore the debited payment
account to the state in which it would have been had the
defective payment transaction not taken place.
(2) The payment initiation service provider has an obligation
to prove that the payment order was received by the account
servicing payment service provider of the payer in accordance
with Section 90 of this Law and that, in relation to the stage of
the payment under its responsibility, the payment was
authenticated, accurately recorded and not affected by a
technical breakdown or other deficiency linked to the
non-execution, defective or late execution of the
transaction.
(3) If the payment initiation service provider is responsible
for the non-execution, defective or late execution of the
payment, it shall, upon a request of the account servicing
payment service provider, immediately refund all the losses
incurred thereto and the amounts refunded to the payer.
[20 June 2018]
Section 100. Any compensation of losses additional to
that provided for Sections 98, 99, and 99.1 of this
Law may be determined in accordance with the laws and regulations
applicable to the contracts concluded between the payment service
user and the payment service provider.
[20 June 2018]
Section 101. (1) If the liability of a payment service
provider provided for in Sections 86 and 99 of this Law is
attributable to another payment service provider or to an
intermediary, the relevant payment service provider or
intermediary shall compensate the first payment service provider
for any losses incurred or sums paid in accordance with the
provisions of Sections 86 and 99 of this Law also if any of the
payment service providers fail to use the strong customer
authentication.
(2) Additional compensation of losses may be specified in
contracts in accordance with the laws and regulations applying to
the contracts between the payment service provider and the
intermediary.
[20 June 2018]
Section 102. The liability specified in Section
75.4, Chapters XI, XII, XIII, and XIV of this Law
shall not arise in cases of abnormal and unforeseeable
circumstances beyond the control of the party pleading for the
application of those circumstances, the consequences of which
would have been unavoidable despite all efforts to the contrary,
or where a party is bound by other legal obligations laid down in
legal acts of Latvia.
[2 March 2017]
Section 103. (1) Payment systems and payment service
providers are entitled to process personal data in accordance
with the laws and regulations governing personal data protection
when it is necessary to prevent unauthorised use of payment
instruments or fraudulent payments and ensure investigation and
detection of such transactions.
(2) The personal data provided for within the scope of this
Law are processed and the information containing such data is
transferred in conformity with the requirements of the laws and
regulations governing personal data protection.
(3) The payment service provider shall only process and retain
such personal data which are necessary for the execution of the
payment services and have been provided with the explicit consent
of the payment service user.
[24 April 2014; 20 June 2018]
Section 104. (1) The payment service provider and the
electronic money issuer shall ensure an efficient procedure for
the examination of submissions and complaints (disputes) of
payment service users and electronic money holders regarding
provision of services and for the management procedures. Complete
written information regarding the procedure for the examination
of submissions and complaints (disputes) shall be freely
available at the institution of the payment service provider or
electronic money issuer and on the website of the payment service
provider or electronic money issuer if such has been created.
(2) The payment service provider and the electronic money
issuer shall develop and approve the procedures for the
examination of submissions and complaints (disputes), ensuring
checking of the facts indicated in the complaint, detection and
elimination of potential conflicts of interests, and shall be
responsible for conformity with such procedures.
(3) If the institution is offering payment services or
services of distribution or redeeming of electronic money in
another Member State in accordance with the procedures laid down
in Section 32 or 33 of this Law, it shall ensure the procedures
for the examination of submissions and complaints (disputes) in
the official language of the relevant Member State or in another
language if the institution and the payment service user or
electronic money holder have agreed thereupon.
(4) The payment service provider and the electronic money
issuer shall provide, in writing or using another durable medium
on which it has agreed with the payment service user or
electronic money holder, an extensive answer to the submitter of
the complaint within 15 business days after receipt of the
complaint.
(5) If it is not possible to provide an answer within the time
period specified in Paragraph four of this Section due to reasons
beyond the control of the payment service provider, then the
payment service provider or electronic money issuer shall inform
the submitter of the complaint regarding the reasons for delay
and indicate the time period by which the submitter of the
complaint will receive the final answer. The time period for the
receipt of the final answer may not exceed 35 business days since
receipt of the complaint.
(6) The payment service provider and the electronic money
institution shall inform the payment service user and the
electronic money holder of at least such one out-of-court dispute
resolution body within the meaning of the Law on Out-Of-Court
Consumer Dispute Resolution Bodies which is competent to handle a
dispute regarding the rights and obligations arising from this
Law.
(7) The payment service provider and the electronic money
issuer shall ensure that information regarding that referred to
in Paragraph six of this Law is freely available at the
institution of the payment service provider or electronic money
issuer and on the website of the payment service provider or
electronic money issuer if such has been created, and also in the
section of general provision in the contract which has been
concluded with the payment service user or electronic money
holder.
[17 March 2011; 20 June 2018; 30 September 2021]
Chapter
XIV.1
Operational and Security Risks and
Authentication
[20 June 2018]
Section 104.1 (1) The payment service
provider has an obligation, within the scope of the internal
control system, to develop appropriate risk mitigation measures
and control mechanisms to manage the operational and security
risks, relating to the payment services they provide.
(2) Within the scope of the internal control system, the
payment service provider shall determine and maintain effective
security incident management procedures of information systems,
including procedures for the detection and classification of
major operational and security incidents.
(3) The payment service provider shall, each year by 1 March,
submit to Latvijas Banka an updated and comprehensive assessment
of the operational and security risks relating to the payment
services provided thereby in the previous year and on the
adequacy of the risk mitigation measures implemented and control
mechanisms introduced in response to those risks.
(4) Latvijas Banka shall issue the regulations regarding the
procedures by which payment service providers shall determine,
classify operational and security incidents and notify it
thereof.
(5) Latvijas Banka shall issue the regulations regarding the
procedures by which payment service providers shall develop,
classify operational and security risk assessment and submit it
thereto.
[20 June 2018; 23 September 2021; 9 November 2023]
Section 104.2 (1) If the payment service
provider detects a major operational or information system
security incident, it shall, without delay, notify Latvijas Banka
thereof.
(2) If the security incident has or may have an impact on the
financial interests of payment service users of the payment
service provider, the payment service provider shall, without
delay, inform its payment service users of the incident and all
measures that they can take to mitigate the adverse effects of
such incident.
(3) Upon receipt of the notification referred to in Paragraph
one of this Section, Latvijas Banka shall, without delay, notify
the European Banking Authority and the European Central Bank of
the major incident. If necessary, Latvijas Banka shall inform
also other participants of the financial market of Latvia and the
information technology security incident response institution -
the Institute of Mathematics and Computer Science of the
University of Latvia - of the major incident.
(4) If Latvijas Banka has received a notification on a major
operational or information system security incident in another
Member State from the European Banking Authority and the European
Central Bank, it shall evaluate such notification and, if
necessary, inform thereof the information technology security
incident response institution - the Institute of Mathematics and
Computer Science of the University of Latvia - and payment
service providers which provide their services in Latvia, as well
as take other measures to protect security of the financial
system.
[20 June 2019; 23 September 2021 / Amendment
regarding the replacement of the word "the Commission" with the
words "Latvijas Banka" and amendment regarding the replacement of
the words "financial and capital market" with the words
"financial market" shall come into force on 1 January 2023.
See Paragraph 41 of Transitional Provisions]
Section 104.3 (1) The payment service
provider shall, at least twice a year by 31 January and by 31
July, provide statistical data to Latvijas Banka on fraud and
other illegal activities in the previous six months which are
related to the use of the means of payment in the previous six
months.
(2) Latvijas Banka shall issue the regulations regarding the
procedures by which payment service providers shall submit
statistical data on fraud and other illegal activities which are
related to the use of the means of payment.
[20 June 2018 / Amendment regarding the replacement
of the word "the Commission" with the words "Latvijas Banka" and
amendment regarding the replacement of the words "regulatory
provisions" with the word "regulations" shall come into force on
1 January 2023. See Paragraph 41 of Transitional
Provisions]
Section 104.4 (1) The payment service
provider has an obligation to apply the strong authentication
where the payer:
1) accesses its payment account online;
2) initiates a payment;
3) carries out any action through a remote service which may
imply a risk of payment fraud or other abuses.
(2) In relation to the initiation of electronic remote
payments the payment service provider has an obligation to apply
the strong authentication which dynamically links the transaction
to a specific amount and a specific payee.
(3) In the cases referred to in Paragraph one of this Section,
the payment service provider has an obligation to introduce
adequate security measures to protect the confidentiality and
integrity of personalised security credentials of payment service
users.
(4) If payment is initiated through a payment initiation
service provider, the provisions of Paragraphs two and three of
this Section shall be applied. If the information is requested
through an account information service provider, the provisions
of Paragraphs one and three of this Section shall be applied.
(5) The account servicing payment service provider shall
ensure that the payment initiation service provider and the
account information service provider may rely on the
authentication provided by the account servicing payment service
provider to the payment service user in accordance with
Paragraphs one and three of this Section and, if the payment
initiation service provider is involved, in accordance with
Paragraphs one, two, and three of this Section.
(6) Payment service providers shall conform to the mutual
communication security requirements and the strong authentication
requirements which are laid down in this Law, the regulations
issued by Latvijas Banka, as well as in Regulation No
2018/389.
(7) The payment service provider has the right to withdraw
from the requirements of this Section and to exercise the
exceptions specified in Regulation No 2018/389.
[20 June 2018; 23 September 2021 / Amendment
regarding the replacement of the word "the Commission" with the
words "Latvijas Banka" and amendment regarding the replacement of
the words "regulatory provisions" with the word "regulations"
shall come into force on 1 January 2023. See Paragraph 41
of Transitional Provisions]
Chapter XV
Out-of-court Examination of Complaints and Compensation of
Losses
Section 105. (1) The Consumer Rights Protection Centre
shall perform supervision in accordance with the laws and
regulations over conformity with the provisions of Section
46.1, Chapters VII, VIII, IX, IX.1, X, XI,
XII, XIII, XIII.1, and XIV of this Law and the
directly applicable legal acts of the European Union in the field
of payment services and electronic money in relation to payment
service users or electronic money holders which are considered to
be consumers. The Consumer Rights Protection Centre shall examine
complaints of consumers in accordance with the Consumer Rights
Protection Law.
(2) Latvijas Banka shall, in accordance with the laws and
regulations, examine the submissions submitted in accordance with
the provisions of Chapters VII, VIII, IX, IX.1, X, XI,
XII, XIII, XIII.1, XIV, and XIV.1 of this
Law and the directly applicable legal acts of the European Union
in the field of payment services and electronic money by such
payment service users or electronic money holders which are not
considered to be consumers. Latvijas Banka is entitled to
initiate an administrative case when it arises from the
information provided in the submission and the materials appended
thereto that such violation has been committed which has caused
or may cause significant harm to the interests (collective
interests) of a group of such service users or electronic money
holders or to an individual user of such services or to the
electronic money holder which is not considered to be a consumer.
Latvijas Banka shall provide an answer to the submitter of the
application in accordance with the procedures laid down by the
Law on Submissions.
(3) The Consumer Rights Protection Centre and Latvijas Banka
are entitled, according to their competence, to request that
payment service users, electronic money holders, payment service
providers, and electronic money issuers provide the information
necessary for the examination of the case and to specify a time
period for its submission.
(4) If the Consumer Rights Protection Centre, upon examining
an administrative case, establishes that non-conformity with the
provisions of Chapters VII, VIII, IX, IX.1, X, XI,
XII, XIII, XIII.1, and XIV of this Law and the
directly applicable legal acts of the European Union in the field
of payment services and electronic money has caused or may cause
significant harm to the interests (collective interests) of a
group of consumers or to an individual consumer, it is entitled
to take the decision by which the payment service provider or
user, the electronic money issuer or holder is requested to
eliminate the non-conformity with the provisions of Chapters VII,
VIII, IX, IX.1, X, XI, XII, XIII, XIII.1,
and XIV of this Law and the directly applicable legal acts of the
European Union in the field of payment services and electronic
money or to eliminate the violations committed, and to specify a
time period for the execution of the activities necessary for
such purpose. The procedures by which the Consumer Rights
Protection Centre shall take a decision and the procedures for
appealing such decision shall be determined in the Consumer
Rights Protection Law.
(5) Latvijas Banka, upon examining an administrative case in
accordance with Paragraph two of this Section, is entitled to
take the decision by which the payment service provider or user,
the electronic money issuer or holder is requested to eliminate
the non-conformity with the provisions of Chapters VII, VIII, IX,
IX.1, X, XI, XII, XIII, XIII.1, XIV, and
XIV.1 of this Law and the directly applicable legal
acts of the European Union in the field of payment services and
electronic money or to eliminate the violations committed, and to
specify a time period for the execution of the activities
necessary for such purpose.
[17 March 2011; 20 June 2013; 2 March 2017; 20 June 2018; 7
November 2019; 23 September 2021 / Amendment regarding the
replacement of the word "the Commission" with the words "Latvijas
Banka" shall come into force on 1 January 2023. See
Paragraph 41 of Transitional Provisions]
Section 106. (1) If the payment service user or
electronic money holder has submitted a complaint regarding
non-conformity with the provisions of Chapters VII, VIII, IX,
IX.1, X, XI, XII, XIII, XIII.1, XIV,
XIV.1, and XV of this Law and the directly applicable
legal acts of the European Union in the field of payment services
and electronic money to the Ombudsman of the association Finance
Latvia Association (hereinafter in this Section - the Ombudsman)
and the Ombudsman detects that the payment service provided does
not conform to the requirements of this Law or the contract
concluded and, as a result, the service user or electronic money
holder has incurred losses, the Ombudsman shall recommend the
payment service provider to compensate the losses incurred by the
payment service user or electronic money holder.
(2) The Ombudsman shall, once a year, provide a report to the
Consumer Rights Protection Centre and Latvijas Banka on the
complaints received from payment service users or electronic
money holders.
(3) The payment service user or electronic money holder may
bring an action before the court regardless of whether it has
previously submitted a complaint to the Ombudsman.
[17 March 2011; 20 June 2013; 2 March 2017; 20 June 2018; 3
April 2019; 23 September 2021 / Amendment regarding the
replacement of the word "the Commission" with the words "Latvijas
Banka" shall come into force on 1 January 2023. See
Paragraph 41 of Transitional Provisions]
Section 107. If the institution which has commenced the
provision of payment services or electronic money services in
Latvia in accordance with the procedures laid down in Section 31,
Paragraph two of this Law, without opening a branch therein,
however, which is operating with or without the intermediation of
an agent, has violated the provisions of Chapters VII, VIII, IX,
X, XI, XII, XIII, XIV, and XIV.1 of this Law and the
directly applicable legal acts of the European Union in the field
of payment services and electronic money or there are justified
suspicions regarding such violations, the institutions which are
responsible for ensuring the conformity with such legal norms
(hereinafter in this Section - the competent authorities) shall
be the competent authorities of the home Member State of the
relevant payment institution and electronic money institution. If
the institution is using agents and branches for the provision of
services and has commenced the provision of payment service or
distribution or redeeming of electronic money in accordance with
the procedures laid down in Section 31, Paragraph one of this
Law, the competent authorities of such Member State in which the
relevant service is provided shall be the competent
authorities.
[20 June 2018]
Transitional Provisions
1. In relation to payments which have been initiated by 1
January 2012, except for the payments referred to in Section 93,
Paragraph two of this Law, the payer and its payment service
provider may agree on a time period for the execution not
exceeding three business days. The time period for the execution
of a payment may be extended for one more business day if the
payment has been initiated and executed in printed form.
2. Until 31 May 2010, the provisions of Chapters VII, VIII,
IX, X, XI, XII, XIII, XIV, and XV need not be applied to payment
services which are provided according to the framework contracts
concluded by 31 May 2010. Starting from 1 June 2010, payment
service providers shall ensure the conformity of the provided
payment services with the requirements of Chapters VII, VIII, IX,
X, XI, XII, XIII, XIV, and XV of this Law in relation to all
valid contracts.
3. The consent of the payer (within the meaning of Section 80)
to debit funds from the account of the payer, provided for in the
direct debit contracts which have been concluded until the day of
coming into force of this Law and in which euros are used for the
settlement of accounts, shall be considered, starting from 1 June
2010, a consent of the payee to submit a payment order to the
payment service provider to debit funds from the account of the
payer.
4. The consent of the payer (within the meaning of Section 80)
to debit funds from the account of the payer, provided for in the
direct debit contracts which have been concluded until the day of
introduction of euro and in which lats are used for the
settlement of accounts, shall be considered also a consent of the
payee to submit a payment order to the payment service provider
to debit funds from the account of the payer.
5. An electronic money institution which, by 30 April 2011,
has informed Latvijas Banka of the commencement of operation of
an electronic money institution in accordance with the
requirements of the Credit Institution Law shall, by 30 October
2011, submit a notification to Latvijas Banka on the registration
in the Register of Institutions in accordance with the provisions
of Section 5.1 of the Law on Payment Services and Electronic
Money.
[17 March 2011]
6. An electronic money institution which by 30 April 2012 is
not registered in the register of institutions referred to in
Section 10 of this Law is prohibited from issuing electronic
money after 30 April 2012.
[17 March 2011]
7. A payment institution which does not need a licence to
commence its operation in accordance with the provisions of
Section 5 of this Law and which by 30 April 2011 is already
registered in the register of institutions referred to in Section
10, Paragraph three of this Law, shall, until 1 July 2011, submit
information to the Commission regarding how the payment
institution is ensuring fulfilment of the requirements of Section
38, Paragraph one of this Law, if in addition to the provision of
payment services the payment institution is conducting the
commercial activity referred to in Section 36, Paragraph one of
this Law, as well as certification that the payment institution
conforms to the requirements of Section 5, Paragraph one, Clause
2 of this Law.
[17 March 2011]
8. The Commission shall exclude a payment institution which by
1 July 2011 has not fulfilled the requirements of Paragraph 7 of
Transitional Provisions of this Law regarding submission of the
information and the certification from the register of
institutions referred to in Section 10, Paragraph three of this
Law, and the latter is prohibited to provide payment
services.
[17 March 2011]
9. A payment institution which does not need a licence to
commence its operation in accordance with the provisions of
Section 5 of this Law and which by 30 April 2011 is already
registered in the register of institutions referred to in Section
10, Paragraph three of this Law shall, by 1 September 2011, pay
the fee specified in Section 40.1, Paragraph one of
this Law for financing the operation of the Commission in
accordance with the procedures laid down in the regulatory
provisions of the Commission referred to in Section
40.1, Paragraph two of this Law.
[17 March 2011]
10. Section 44.1, Paragraph one of this Law shall
come into force on 1 August 2011, but Section 92.1,
Paragraph one - on 1 July 2011.
[12 May 2011]
11. The Cabinet shall, not later than by 31 July 2011, issue
the regulations referred to in Section 44.1 of this
Law.
[12 May 2011]
12. The payment service providers which are specified in
Section 2, Paragraph two, Clauses 3, 4, and 7 of this Law have an
obligation, in accordance with the procedures and within the time
period stipulated by the Cabinet, to submit information to the
State regarding payment accounts of legal persons - residents of
the Republic of Latvia, as well as permanent representative
offices of non-residents in Latvia - which have been opened and
have not been closed prior to the day of coming into force of
Section 44.1 of this Law.
[12 May 2011]
13. An institution which does not conform to the condition of
Section 5, Paragraph one, Clause 1 of this Law regarding
non-exceedance of the arithmetic mean of payments or the
condition of Section 5.1, Paragraph one, Clause 1 of
this Law regarding non-exceedance of the average outstanding
electronic money is entitled, after the day of coming into force
of these amendments, to continue issuing of electronic money or
provisions of payment services if it submits the documents
referred to in Section 11 of this Law to the Commission by 31
July 2014 in order to receive a licence for the operation of a
payment institution or for the issuing of electronic money. If
the institution referred to in this Paragraph has not received a
licence for the operation of a payment institution or for the
issuing of electronic money until 30 January 2015, its further
operation should be terminated.
[24 April 2014]
14. The Commission shall register a retail payment system
which has commenced operation until the day of coming into force
of Section 26.1 of this Law in the register of retail
payment systems if the operator of the retail payment system
submits information and the necessary documents to the Commission
by 15 July 2014. If a retail payment system has not been
registered in the register referred to in Section
26.1, Paragraph two of this Law until 29 August 2014,
its further operation should be terminated.
[24 April 2014]
15. Section 44.2 of this Law shall come into force
on 1 July 2014.
[24 April 2014]
16. Payment service institutions and electronic money
institutions shall ensure the conformity of the persons
responsible for the fulfilment of the requirements for the
prevention of money laundering and terrorism financing with the
requirements of Sections 20 and 21 of this Law by 1 January
2017.
[19 May 2016]
17. The Cabinet shall, by 1 March 2017, issue the regulations
provided for in Section 44.3, Paragraph ten of this
Law.
[23 November 2016]
18. The payment service provider which is specified in Section
2, Paragraph two, Clauses 2, 3, 4, 7, and 8 of this Law shall
execute such collection tasks, orders on the partial or complete
suspension of the settlement operations of the taxpayer, or
orders given by bailiffs on the transfer of funds which have been
issued by 30 June 2017, and the orders specified in Section
44.3, Paragraphs one and two of this Law which have
been notified, using the type of data exchange specified in
Section 44.3, Paragraph three, Clauses 2 and 3 of this
Law, in the order as they have been received by the payment
service provider. The payment service provider which is specified
in Section 2, Paragraph two, Clauses 2, 3, 4, 7, and 8 of this
Law shall accept orders by which the amount of the funds or the
activities to be executed specified in such collection tasks,
orders regarding partial or complete suspension of the settlement
operations of the taxpayer, or orders regarding transfer of funds
which have been issued by 30 June 2017 is updated, for execution
in the order of the unique numbers assigned and shall execute in
such order as was specified for execution of the initial order
(order to be replaced).
[23 November 2016]
19. Paragraph three, Clauses 2 and 3 and the second sentence
of Paragraph ten of Section 44.3 of this Law (in
relation to delegation to the Cabinet to determine the procedures
by which the subject of this Section, upon executing the order
specified in Paragraph one of this Section, shall commence and
perform data exchange, using the type of data exchange specified
in Paragraph three, Clause 2 of this Section) is repealed from 1
July 2019.
[23 November 2016]
20. The payment service provider which is specified in Section
2, Paragraph two, Clauses 2, 3, 4, 7, and 8 of this Law shall,
from 1 July 2019, ensure the type of data exchange specified in
Section 44.3, Paragraph three, Clause 1 of this Law.
The payment service provider which is specified in Section 2,
Paragraph two, Clauses 2, 3, 4, 7, and 8 of this Law may, from 1
July 2017, use the type of data exchange specified in Section
44.3, Paragraph three, Clause 1 of this Law in
accordance with the procedures stipulated by the Cabinet,
informing the State Revenue Service and the Court Administration
thereof in advance. The payment service provider which is
specified in Section 2, Paragraph two, Clauses 2, 3, 4, 7, and 8
of this Law and which has not informed the State Revenue Service
and the Court Administration regarding commencement of electronic
data exchange, using the type of data exchange specified in
Section 44.3, Paragraph three, Clause 1 of this Law,
shall, until 30 June 2019, use the type of data exchange
specified in Section 44.3, Paragraph three, Clause 2
of this Law for data exchange with the State Revenue Service in
accordance with the procedures stipulated by the Cabinet and the
type of data exchange specified in Section 44.3,
Paragraph three, Clause 3 of this Law - with bailiffs in
accordance with the procedures provided for in the Civil
Procedure Law as were in force until 30 June 2017.
[23 November 2016]
21. The Commission shall, within three months after Delegated
Regulation of the European Commission regarding the list of
standardised terms of services related to a payment account,
extensively used by consumers, and their definitions, Delegated
Regulation of the European Commission regarding the price list of
services, and Delegated Regulation of the European Commission
regarding the report on the fee applied to services have come
into force, issue the regulatory provisions referred to in
Section 60.1 and 60.2 of this Law, and the
payment service providers shall commence the fulfilment of the
requirements laid down in the abovementioned Section after coming
into force of the relevant regulatory provisions of the
Commission.
[26 October 2017]
22. The first reporting period for which the payment service
provider shall provide the report on the payment fee referred to
in Section 60.2, Paragraph one of this Law shall start
from the day of entry into effect of the regulatory provisions of
the Commission referred to in Section 60.2, Paragraph
two of this Law.
[26 October 2017]
23. The payment service provider shall provide the information
referred to in Section 46.1, Paragraph one of this Law
to the Consumer Rights Protection Centre for the first time not
later than six months after the day of entry into effect of the
regulatory provisions of the Commission referred to in Section
60.1, Paragraph one of this Law.
[2 March 2017; 26 October 2017]
24. Paragraphs one and 1.1 (in the new wording),
Paragraph 1.3, amendment regarding deletion of
Paragraph 1.2, as well as amendments to Paragraphs two
and three of Section 40, Paragraphs one and two (in the new
wording), Paragraph 3.1, amendments regarding deletion
of Paragraph three, amendments to Paragraphs four, five, and six
of Section 40.1 of this Law shall come into force on 1
April 2017. Institutions shall commence payment of the fee
specified in Section 40, Paragraphs one, 1.1,
1.3, Section 40.1, Paragraph one, Paragraph
two, Clause 1, and Paragraph 3.1 of this Law for the
financing of the operation of the Commission from the second
quarter of 2017.
[2 March 2017]
25. Institutions shall commence payment of the fee specified
in Section 40.1, Paragraph two, Clause 2 of this Law
for the financing of the operation of the Commission from 1
January 2018. From 1 April 2017 to 31 December 2017 the
institutions referred to in Section 40.1, Paragraph
two, Clause 2 of this Law shall pay EUR 2000 per year for
financing the operation of the Commission and additionally up to
1.4 per cent (inclusive) from its gross revenue annually which
are related to the provision of services of the electronic money
institution, however, the total payment of the institution for
financing of the operation of the Commission shall not exceed EUR
100 000 per year.
[2 March 2017]
26. Amendment regarding deletion of Section 2, Paragraph two,
Clause 3 and Paragraph 2.1, Clause 3 of this Law shall
come into force on 25 June 2019.
[26 October 2017]
27. An institution which does not need a licence for
commencing the operation in accordance with the provisions of
Section 5 or 5.1 of this Law and which is registered
in the register referred to in Section 10, Paragraph three of
this Law shall, by 13 November 2018, submit additional
information and documents to the Commission certifying the
conformity of the former with the conditions of Section 5,
Paragraph one, Clauses 2.1 and 4 or Section
5.1, Paragraph one, Clauses 2.1 and 4 of
this Law.
[20 June 2018]
28. An institution which is registered in the register
referred to in Section 10, Paragraph three of this Law, but which
does not conform to the conditions of Section 5, Paragraph one or
Section 5.1, Paragraph one of this Law anymore shall,
by 13 September 2018, submit all the necessary documents and
information to the Commission for receipt of the licence. The
institutions shall the fee referred to in Section
39.1, Clause 3 of this Law in reduced amount - EUR
2500 - for examination of the documents.
[20 June 2018]
29. The institution which, by 13 January 2019, has not
received a licence for the operation of a payment institution or
electronic money institution in accordance with the procedures
laid down in Paragraph 28 of these Transitional Provisions or has
not certified its conformity with the conditions of Section 5,
Paragraph one or Section 5.1, Paragraph one of this
Law in accordance with the procedures laid down in Paragraph 27
of these Transitional Provisions shall be excluded from the
register referred to in Section 10, Paragraph three of this Law
by the Commission, and the institution is prohibited to provide
payment services and to issue electronic money.
[20 June 2018]
30. A licensed institution shall, by 1 September 2018, ensure
conformity with the requirements of this Law, drawing up the
documents referred to in Section 11, Paragraph one, Clauses 14,
15, 16, 17, and 18 of this Law.
[20 June 2018]
31. It shall be considered that an institution which is
registered in the register referred to in Section 10, Paragraph
three of this Law with the right to provide the payment service
referred to in Section 1, Clause 1, Sub-clause "g" of this Law
and is registered as an electronic communications merchant shall
provide the payment service referred to in Section 1, Clause 1,
Sub-clause "c" of this Law.
[20 June 2018]
32. The Commission shall exclude an electronic communications
merchant which is providing the payment service referred to in
Section 1, Clause 1, Sub-clause "c" of this Law, however, has not
received the licence for the operation of a payment institution
in accordance with the procedures laid down in Section 11 of this
Law by 13 January 2020, from the register of institutions
referred to in Section 10, Paragraph three of this Law, and the
electronic communications merchant is prohibited to provide
payment services, except for the services referred to in Section
3, Paragraph one, Clause 11 of this Law.
[20 June 2018]
33. An electronic communications merchant which is providing
the services referred to in Section 3, Paragraph one, Clause 11
of this Law shall, by 13 January 2019, submit the report referred
to in Section 3, Paragraph four of this Law for the first
time.
[20 June 2018]
34. A person who is providing the services referred to in
Section 3, Paragraph one, Clause 10 of this Law shall, by 1
September 2018, submit the notification referred to in Section 3,
Paragraph two of this Law on conformity of services with the
conditions of Section 3, Paragraph one, Clause 10 of this Law and
a corresponding justification, describing its operation to the
Commission.
[20 June 2018]
35. Section 1, Clauses 38 and 39, amendments to Section 12,
Paragraph three in relation to the deletion of this Paragraph and
to Section 34 in relation to the deletion of Paragraph two,
Section 35 in the new wording by which new procedures for the
calculation of own funds of institutions are introduced,
amendments to Section 64 in relation to the supplementation of
Clauses 2 and 5 with Sub-clause "g", amendments to Section 67,
Paragraph two, and Section 80, Paragraph two in the new wording,
Section 81, Paragraph six, Section 84, Paragraph three, Section
86, Paragraph one in the new wording, and Section 86, Paragraphs
1.1 and 1.2, amendments to Section 87,
Paragraphs one and three in relation to the deletion of Paragraph
three, Section 87, Paragraphs 1.1 and 3.1,
Section 87.1, Section 88, Paragraphs 2.1
and 4.1, amendments to Section 89 in relation to the
deletion of Paragraph three, Section 92, Paragraph four in the
new wording, as well as Section 99, Paragraph 3.1 and
amendment to Paragraph six, Paragraph 10.1, and
amendment to Paragraph twelve, as well as Section 104, Paragraphs
two, three, four, five, six, and seven of this Law shall come
into force on 1 October 2018.
[20 June 2018]
36. The payment service provider shall commence the
application of the requirements of Section 80.1,
Paragraph three, Clause 4 and Paragraph four, Clause 1, Section
80.2, Paragraph two, Clause 3 and Paragraph three,
Clause 1, Section 81.1, Paragraph two, Clause 3, and
Section 104.4 of this Law from 14 September 2019.
[20 June 2018]
37. The payment service provider shall, in accordance with
Section 104.1, Paragraph three of this Law by 13
January 2019, submit a comprehensive evaluation on the
operational and security risks related to the payment services
provided thereby to the Commission.
[20 June 2018]
38. By 31 July 2019, the payment service provider shall, in
accordance with Section 104.3, Paragraph one of this
Law, for the first time submit to the Commission statistical data
on fraud and other illegal activities in the previous six months
which are related to the use of means of payment in the previous
six months.
[20 June 2018]
39. Section 44.2, Paragraph four of this Law shall
come into force on 1 May 2019.
[3 April 2019]
40. Payment service providers shall ensure the fulfilment of
the requirements referred to in Section 44.2,
Paragraph four of this Law by no later than 1 January 2020.
[3 April 2019]
41. Amendments to this Law regarding the replacement of the
word "Commission" with the words "Latvijas Banka" throughout the
Law, except for the name "European Commission" in Section 10,
Paragraph four, the titles of Regulations of the European
Commission in Section 31, Paragraph one, Clause 1 and Section
81.1, Paragraph two, Clause 3, and also Transitional
Provisions, amendments regarding the replacement of the words
"financial and capital market" with the words "financial market"
throughout the Law, the replacement of the words "regulatory
provisions" with the word "provisions" throughout the Law,
amendments to Section 40, Paragraphs one, 1.1,
1.3, and 1.4 (regarding the replacement of
the words "for financing the operation of the Commission" with
the words "to Latvijas Banka") and regarding the deletion of
Paragraph three, amendments to Section 40.1, Paragraphs one, two,
3.1, and five (regarding the replacement of the words
"for financing the operation of the Commission" with the words
"to Latvijas Banka") and regarding the deletion of Paragraphs
four and six, and also amendment regarding the deletion of
Section 53 shall come into force concurrently with the Law on
Latvijas Banka.
[23 September 2021]
42. Section 1, Clauses 42 and 43, the new wording of Section
2, Paragraph one, amendments to Section 3, Paragraph one, Clause
5 and Paragraph two, Chapter II.2, Section
39.1, Clause 5, and the new wording of Section
55.1, Paragraph one of this Law shall come into force
concurrently with the Law on Latvijas Banka.
[23 September 2021]
43. Latvijas Banka shall, on the day of coming into force of
the Law on Latvijas Banka, register capital companies which have
received a licence of Latvijas Banka for the buying and selling
of cash in foreign currencies in the register referred to in
Section 26.3, Paragraph two of this Law. The
abovementioned capital companies shall ensure conformity with the
requirements laid down in Section 26.3, Paragraph two
of this Law and applicable to foreign exchange companies until 31
December 2023.
[23 September 2021]
44. Section 40, Paragraph two of this Law shall be repealed
from the day of coming into force of the Law on Latvijas
Banka.
[23 September 2021]
44. Section 40, Paragraph two of this Law shall be repealed
from the day of coming into force of the Law on Latvijas
Banka.
[23 September 2021]
45. The regulatory provisions issued by the Financial and
Capital Market Commission on the basis of this Law, until the day
of coming into force of the Law on Latvijas Banka, shall be
applied until the day of coming into force of the relevant
regulations of Latvijas Banka, but not longer than until 31
December 2024.
[23 September 2021]
46. Licensed electronic money institution is entitled to
provide the crypto-asset services referred to in Section 4,
Paragraph four, Clauses 2 and 3 of this Law from 30 December
2024.
[13 June 2024]
Informative Reference to European
Union Directives
[17 March 2011; 2 March 2017; 20
June 2018; 17 June 2020]
This Law contains legal norms arising from:
1) Directive 2007/64/EC of the European Parliament and of the
Council of 13 November 2007 on payment services in the internal
market amending Directives 97/7/EC, 2002/65/EC, 2005/60/EC and
2006/48/EC and repealing Directive 97/5/EC;
2) Directive 2009/110/EC of the European Parliament and of the
Council of 16 September 2009 on the taking up, pursuit and
prudential supervision of the business of electronic money
institutions amending Directives 2005/60/EC and 2006/48/EC and
repealing Directive 2000/46/EC;
3) Directive 2014/92/EU of the European Parliament and of the
Council of 23 July 2014 on the comparability of fees related to
payment accounts, payment account switching and access to payment
accounts with basic features (Text with EEA relevance);
4) Directive 2015/2366/EU of the European Parliament and of
the Council of 25 November 2015 on payment services in the
internal market, amending Directives 2002/65/EC, 2009/110/EC and
2013/36/EU and Regulation (EU) No 1093/2010, and repealing
Directive 2007/64/EC (Text with EEA relevance);
5) Directive (EU) 2015/849 of the European Parliament and of
the Council of 20 May 2015 on the prevention of the use of the
financial system for the purposes of money laundering or
terrorist financing, amending Regulation (EU) No 684/2012 of the
European Parliament and of the Council, and repealing Directive
2005/60/EC of the European Parliament and of the Council and
Commission Directive 2006/70/EC;
6) Directive (EU) 2018/843 of the European Parliament and of
the Council of 30 May 2018 amending Directive (EU) 2015/849 on
the prevention of the use of the financial system for the
purposes of money laundering or terrorist financing, and amending
Directives 2009/138/EC and 2013/36/EU.
The Law has been adopted by the Saeima on 25 February
2010.
President V. Zatlers
Rīga, 17 March 2010
1 The Parliament of the Republic of
Latvia
Translation © 2024 Valsts valodas centrs (State
Language Centre)