Requirements for Suppliers

Requirements for cooperation partners – suppliers of cars and other machinery


When accepting lease applications from the customers of the associate members of the Finance Latvia Association (Association or FLA) and when entering into leasing contracts with such customers on behalf of the associate members of the Association the suppliers of cars and other machinery have to comply with the requirements of the Latvian Law on the Prevention of Money Laundering and Terrorism and Proliferation Financing (hereinafter – the AML Law).


In order to ensure compliance with the requirements of the AML Law, it is necessary to carry out regular staff training aimed at improving their proficiency in identifying unusual and suspicious transactions and performing the tasks set out in the internal control system. Regular staff training means training that is carried out at least once every year.


In consideration of the previously stated, the Association hereby recommends the suppliers of cars and other machinery to ensure that all their employees who are engaged in collaboration with the FLA associate members have completed anti-money laundering training and have received a respective certificate. The training should be completed by all staff members who have passed the AML test more than 12 months ago and equally by all new employees. FNA members reserve the right to request evidence confirming that the specific corporation partner’s employee has passed the AML test.


To ensure proper employee training, the FLA offers the employees of car and machinery suppliers to undergo AML compliance training at the FLA cooperation partner – “Compliance Baltic”. The content of this e-training course is approved with the FLA and its particularly aligned to the specifics of leasing transactions.


To register your employees for the e-training course, please send an application containing the name, surname, position, e-mail address of the trainee and the details of the payer (i.e. the supplier) for invoicing purposes to the e-mail address: info@compliancebaltic.eu. Each registered employee will receive an invitation and access details for the e-training course and all registered participants will have to provide consent to personal data processing for training purposes and disclosure to FLA members.


In case you have any questions, please contact us electronically: info@fiancelatvia.eu or per phone: +371 287 18175.

Frequently asked questions

  • What should I do if I am on vacation and cannot be physically present in the bank for making the monthly payment?

First of all, we recommend each customer to select the most convenient payment method which – in most cases does not require physical presence. The banks of Latvia offer the following payment methods:


  1. Automatic payments
  2. Payments via online banking
  3. Plan your absence and obligations by making advance payments.
  • I have lost my job but am looking forward to get a new one in the nearest couple of months. However, I will not be able to make the monthly payments until then. What should I do?

You should definitely contact the leasing company in order you could arrive at a mutually acceptable solution of this situation.

  • What should I do in case the leased car is stolen, is involved in a car accident or has been intentionally damaged by someone?

  1. To acquaint with the CASCO insurance terms and conditions, please visit the Latvian Insurers Association’s webpage here or consult your insurance agent.
  2. The lease contract obliges the customer to satisfy his/her payment obligations irrespective of whether the customer can/cannot use the object of the lease. This requirement mostly covers cases when the object of the lease is stolen or completely destroyed
  3. Please notify the leasing company thereof in writing, among other things specifying the persons that have been informed on the accident (police, insurance company), the circumstances of the accident and the estimated amount of damages
  4. Due to the fact that the leasing company is mentioned in the insurance policy as the loss payee, after taking the insurance decision the insurer will request the leasing company to name the loss payee.


Below are two options:


  1. The payment is transferred to the account of the workshop where the repairs will be done.
  2. The payment is transferred to the account of the leasing company.
  • Can I pay off car leasing early?

Yes, leasing companies foresee such an option. If the customer wants to pay car finance off early, he has to file with the leasing company a written application requesting upfront payment for the object of the lease. After receipt of the application, the leasing company decides on the granting of the permission for early lase pay off. After taking the decision, the leasing company issues the final bill to be paid by the customer (including amounts outstanding, if any). As soon as the customer settles the payment, the leasing company will make a respective entry in the CSDD system allowing registration of the vehicle in the customer’s name and issues a respective invoice in case the customer is a legal entity.

  • Can I travel abroad with a leased vehicle?

Yes, you may take the leased vehicle abroad during the term of the leasing contract. However, you require a respective permission from the leasing company for taking the vehicle abroad. Not to face any unforeseen hindrances for receiving the authorization please check that you are not late with any payments under the contract and you hold a valid CASCO insurance, all premiums are paid in due time and the insurance is valid in the country you are going to visit.

IMPORTANT! After Russia’s invasion of Ukraine the issuance of permissions for taking leased vehicles to such countries as Russia and Belarus has been restricted. Please consult your finance provider regarding the possibility to receive a permission for entering these countries.

  • What are the requirements for CASCO insurance?

  1. The policy must be issued by a trusted insurance company;
  2. The leasing company should be listed in the insurance policy as the loss payee;
  3. The vehicle should be insured at its market value;
  4. The policy should provide full CASCO insurance coverage (e.g. road traffic accidents, theft, robbery, fire, natural disasters, vandalism etc. risks).


Factoring is the funding of current assets against receivables. In substance it is a service for improving company’s cash flow that is based on the assignment of accounts receivable to a factoring company against immediate payment. Thus, factoring gives businesses the opportunity to receive funding without providing any direct guarantees where the only “pledge” is the accounts receivable or funds due from buyers. Factoring and invoice discounting services ensure regular cash flows, facilitate its planning, cut customer servicing and administrative costs and reduce the risks associated with accounts receivable therewith allowing the businesses to allocate more resources to their principal operations.


Factoring includes funding, administration and takeover of claim rights from buyers and the reduction of risk in case of late payment.


  • The classical scheme for any type of factoring in principle is as follows:

  1. The seller transfers the goods or the service to several buyers;
  2. The seller delivers copies of yet unpaid invoices to the leasing company;
  3. The leasing company makes an advance to the seller for the accepted invoices in the amount of 80-90% of the invoiced amount;
  4. The leasing company receives full payment from the buyers within a certain period (commonly 30 to 90 days);
  5. The leasing company repays the seller the margin (10-20%) less interest on financing as agreed in the contract.


Factoring as a service is beneficial to both: the sellers and the buyers. The advantages of factoring are particularly used by the following areas/industries: wholesalers (for receiving payments from department stores and retail networks); manufacturers (for selling goods to distributors); suppliers (for selling goods to manufacturers); export companies (for assessing the buyer’s creditworthiness); small and medium sized enterprises (to increase operational efficiency); contractors for large scale projects (in terms of competition shorter payment terms are always treated as an advantage).


  • What are the seller’s benefits?

  1. Option to receive fast and flexible current asset financing
  2. Improve company’s liquidity
  3. Possibility to receive buyer’s credit adequacy assessment
  4. Simplified cash flow planning
  5. Possibility to increase sales
  6. Strengthen control over accounts receivable
  7. Possibility to offer the buyer longer payment terms
  8. Possibility to immediately settle accounts with suppliers
  9. Improved provisions due to increase in free capital for purchase of goods
  10. Possibility to devote more time and resources to one’s principal business
  11. Reduced accounts receivable administration costs
  12. Improved debt payment discipline as the practice shows that the respect of businesses towards financial institutions is more explicit.


  • What are the buyer’s benefits?

  1. Simple planning of cash flows
  2. Easy settlement of payments with the seller (set payment tern, method and details)
  3. Possibility to obtain more attractive terms of payment

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