RIGA (Reuters) - Latvia came under renewed pressure to accelerate financial reforms as a senior U.S. official, at a meeting with its prime minister, underscored the urgent need for stricter controls after a money laundering scandal.

Assistant Secretary for Terrorist Financing in the U. S. Department of the Treasury Marshall Billingslea speaks during a news conference in Riga, Latvia May 16, 2019. REUTERS/Ints Kalnins

His remarks come more than a year after the United States acted to shut down ABLV, a Latvian bank it said was linked to North Korea’s nuclear weapons program, to money laundering and Russian corruption.

Marshall Billingslea, who heads the Office of Terrorist Financing and Financial Crimes at the U.S. Treasury, said during a visit to Latvia on Thursday that the Baltic state required “urgently needed legislation” that was “long overdue”.

“The new government is moving swiftly but there is a lot that has to be done,” said Billingslea, praising Prime Minister Krisjanis Karins’s intentions but highlighting the need for results. “The proof is in the pudding.”

The bank’s closure was the first in a series of European money-laundering scandals that later sucked in Nordic lenders, prompting a pan-European debate about how to control such financial crime.

ABLV, and Latvia’s supervision of its winding-down, remains at the center of tension between Latvia and Washington, which wants tighter control of the bank’s liquidation, people with direct knowledge of the matter have said.

After Latvia secured independence in 1991 from the then-Soviet Union, more than a dozen of its banks promoted themselves as a gateway to Western markets for clients in former Soviet states, promising Swiss-style secrecy.

That policy has now been abandoned under U.S. pressure but despite forecasts by Latvian officials a year ago after the shuttering of ABLV that many other banks would also close, they are still open.

The United States, which through the dollar currency holds large sway over financial markets, is pushing back against Russian influence globally.

Billingslea visited Latvia for talks with Karins, who is seeking to pass legislation to give parliament more power in hiring and firing the country’s bank supervisor.

The bank supervisor has accused the Riga government of interfering in his work and said the legal changes, which also grant the regulator more power to close banks with “dirty money”, were a veiled attempt to oust him.

Latvia faces a review by international money-laundering standards watchdog Moneyval in the coming months, which some officials fear could label the country as risky, alongside the likes of Serbia and Pakistan.

Karins, who took over as prime minister in January, said alongside Billingslea that he was serious about reform.

“My focus...is to put the system in order,” Karins told reporters. “If Latvia...failed to implement Moneyval’s recommendations, it would push our country into the grey list or even black list, which would mean a recession. It would mean lost jobs.”

Latvia’s central bank governor is also being investigated for corruption, including bribery linked to ABLV, after being detained more than a year ago. He has yet to be prosecuted, returned to his job and denies the allegations.