Latvia proposes using unclaimed funds from closed accounts for public needs

The Latvian Ministry of Justice has put forward a proposal to channel long-unclaimed funds from closed accounts held by foreign residents and legal entities into the financing of socially significant functions. Justice Minister Edvards Smiltēns submitted the initiative as part of amendments to the law on preventing money laundering and terrorist and proliferation financing.

Under the proposal, if a financial institution has closed an account on its own initiative and money remains in it, those funds could become state property after five years if the client does not claim them. The rule would not apply to natural persons who are Latvian residents, nor to funds that are frozen, seized or subject to recovery. Clients would also have an additional six months to claim their money before the state takes possession.

According to the Latvian Financial Industry Association, at the start of 2025 credit institutions held 39,136 such accounts containing approximately 26.8 million euros in total. The exact amount that might eventually pass to the state cannot be determined at this stage, the ministry said, because account holders would still be able to come forward.

The ministry suggests the funds could be used for purposes including support for children and young people who have run into conflict with the law at an early age. Smiltēns has proposed allocating the money to establish a Safe House for Children and Young People. The government backed the idea in 2024 but has not yet found financing. According to the ministry, the facility could potentially be located on the former Brasas prison grounds.

The Safe House would offer a secure, professional environment for children and youths with serious behavioural difficulties, providing individually tailored rehabilitation, behavioural correction and specialist support. The aim is to stop problems from worsening and give these young people a chance to change their future path. Establishing the facility would cost around 11.93 million euros.

The Saeima is currently reviewing amendments to the law; the ministry’s proposal was submitted ahead of the second reading.