Backroom predictions: Znotiņa will lack votes for a second term

Several candidates are likely to run for the post of the head of the Financial Intelligence Unit, and Ilze Znotiņa, the country's current Chief Financial Intelligence Officer, might not get enough votes in the Saeima. This is the rumor in the Parliament's backrooms. These rumors in themselves show that not everyone is happy with Znotiņa's tumultuous activities in the financial field.

The first competition for the post of head of the Anti-Money Laundering Service in 2018 was launched by the then head of the service, Viesturs Burkāns, who had headed the "Burkāns' office" since 1998. Discreetly enough for most of the public to not even know about its existence. And Ilze Znotiņa also applied, or rather was applied. At that time, the ABLV Bank scandal had blown up. The Americans demanded the closure of this bank and a total audit of the Latvian banking system, refusing the generous money flows from third countries. The order was accompanied by the nomination of Ilze Znotiņa, an employee of the Foreign Investors Council FICIL.

Offers cyber-muscles and fighting

After formally haggling a bit about the low salary, Ilze Znotiņa accepted the challenge and set about cleaning up the sector. Naturally, one of the first things she did was sort out her own remuneration, and she is now one of the highest paid officials in the country, earning more than €105,000 in 2020. Last year remuneration is not yet publicly known, but it's no less than that. And that is the objective reason why the post of head of the FIU is highly desirable. Even before the competition was officially launched, Ilze Znotiņa had announced in a national news agency that she wanted to run for another term. Znotiņa has a clear program of what she wants to achieve in the next period and what she plans to propose to the government and the legislature. (The competition is launched by the Cabinet of Ministers, the selection is carried out by a commission formed by the State Chancellery, and the final decision is taken by the Saeima.) Znotiņa's main areas of action are completing work on credit institutions in liquidation, tackling the shadow economy and corruption, in particular organized groups providing professional criminal services. It is also necessary to build our "cyber-muscles" and, finally, Latvia must become a recognized regional center of expertise in AML, in the fight against money laundering.

Saeima won't roll out the red carpet

Ilze Znotiņa meets the formal requirements of the competition. Otherwise, she would not have her post. Senior civil servants must have a university degree, be politically neutral and have access to state secrets. And they must have an impeccable reputation, which is a vague requirement. According to the Ministry of the Interior, the requirements will be specified in the text of the job advertisement, taking into account the experience of the State Chancellery in organizing open competitions for senior management posts. The law governing the appointment of the Head of the FIU (PMLTPF law) stipulates that the head of the Financial Intelligence Unit must be a person who has accumulated relevant work and management experience for the post. The advertisement for selection requires the applicant to have at least three years of experience in a managerial capacity or at least three years of individual managerial responsibilities and to have an understanding of the area of money laundering and the prevention of the financing of terrorism. At the same time, the advertisement specifies that one of the two foreign languages that the applicant must be proficient in is English, as this language is "essential for the performance of the duties of the post."

Ilze Znotiņa would have no problem with all this, but even if the highest number of ticks is put next to her name on the selection committee's forms, Znotiņa's path to a second term will not be covered with a red carpet in the Saeima.

Crashing into the other ditch

It should be recalled that last spring, the coalition informally raised the issue of the need to assess Ilze Znotiņa's suitability for the post. Neatkarīgā wrote at the time that "Znotiņa's bad reputation might cause her to lose her job." There were several reasons. It was revealed that after her appointment as head of the Financial Intelligence Unit, she continued to run a private business, which is prohibited by law. She was also punished for this. But even more disappointing was the quality of Znotiņa's work and management style. The police were overloaded with poorly prepared cases sent by the FIU, the banks were intimidated by over-zealous supervision. Then there was the talking out of turn, giving out inappropriate and confidential information about market players, the pressure on the courts, the ignoring of MPs' requests. Eventually, some coalition partners and ministers began to grumble that the overhaul of the financial sector had crashed into the other ditch.

Businesses and banks are finding it difficult to work, and this is most directly linked to the activities of the FIU and Ilze Znotiņa.

In a fair competition, she could also lose

Last year, however, all that frustration came to nothing. Perhaps it was thanks to the strong backing of the US Embassy. But now, with the end of her term approaching, the replacement of the head of the FIU would be less conspicuous, and preparations are already underway in the Saeima to receive the results of the competition commission. It is already known in the Parliament's backrooms that several candidates will be put forward for the post and that Ilze Znotiņa might not get enough votes. Or maybe not. Apparently, she has started a publicity campaign in good time for this. For example, the FIU has just organized an international forum on "Financial Intelligence Unit Autonomy: Building an Effective Anti-Money Laundering and Countering the Financing of Terrorism System". Some former and some current chiefs met online, chatted and concluded, among other things, that "independent budgets, the ability to make decisions on their budgets and an objective, transparent process for appointing FIU leadership are essential preconditions for an autonomous FIU". For Ilze Znotiņa, it is this last point that is currently relevant. If the appointment process of the FIU management is objective and transparent, she may well lose her position in a fair competition. Ilze Znotiņa's last working day as the country's Chief Financial Intelligence Officer is currently May 31.