FIU Latvia: the effectiveness of sanctions depends on unified action and effective implementation

This and many more expert opinions were highlighted at the international conference “Guarding the Gate: sanctions, export controls & business responsibilities,” organized by the Financial Intelligence Unit (FIU Latvia), which brought together more than 120 participants from over 20 countries, including experts from the European Union (EU), the United Kingdom, the United States, and Canada.

Sanctions as a Security Instrument, Not Merely a Political Tool

Opening the conference, the Minister of Foreign Affairs, Baiba Braže, emphasized that sanctions are not just a formal political gesture but a real and effective instrument to help stop the war.

Foreign Minister Baiba Braže: “Sanctions are working and figures clearly demonstrate that sanctions have a significant impact on the Russian economy. Sanctions by the EU, the U.S., the UK and other international partners are effective and must be further strengthened to constrain Russia and its co-aggressors. Together with the Allies, we must continue mutually harmonise the restrictive measures against Russia’s energy sector and financial institutions, as well as working on the alignment of sanctions against Russia and Belarus. Sanctions must also target subjects in third countries who help circumvent sanctions and support aggression. We will keep the sanctions focused on Russian energy exports, the shadow fleet and its supporters until the aggression stops.”

Head of FIU Latvia, Toms Platacis also reminded that since the beginning of the war, the primary mission of the FIU Latvia has been to ensure that Latvia’s financial system is not used to circumvent sanctions.

“The effectiveness of sanctions requires unity at the global level. Since Russia’s full-scale invasion of Ukraine, both individual and collective understanding of the purpose and practical implementation of sanctions has significantly deepened. The initial reaction has evolved into long-term resilience – this is evidenced by the successive EU sanctions packages, each of which targets increasingly critical sectors of the Russian economy to severely limit its capacity to finance the war,” said Mr. Platacis, emphasizing that sanctions enforcement has become a strategic national security issue.

Deputy Head of FIU Latvia for Sanctions Paulis Iļjenkovs noted that the centralization of sanctions implementation in Latvia has proven to be successful: “The decision to designate FIU Latvia as the competent authority for sanctions implementation has been effective. Our national approach is now recognized as a best practice elsewhere in Europe – having a single institution responsible for providing guidance and ensuring consistent implementation of sanctions. To make sanctions truly effective, coordinated action and dialogue at both national and international levels are essential.”

Effective sanctions are based on unity, consistency, and accountability

Sanctions against Russia remain one of the key instruments to weaken the aggressor’s capabilities and strengthen international security. Their effectiveness depends on three fundamental principles – close international cooperation, consistent implementation, and genuine accountability.

First, internationally coordinated sanctions policy among Western partners is essential for this instrument to work. Only through unified action can we ensure that the aggressor cannot exploit gaps between national regimes and that sanctions deliver maximum impact - economically and politically.

Second, consistent enforcement of sanctions is the responsibility of each state. Businesses must be aware of their risks and ensure compliance with the rules, while governments must create clear and transparent systems that allow companies to act accordingly. In Latvia, such unified approach is ensured by FIU Latvia which, as the competent authority in the field of sanctions implementation, provides guidance, coordinates actions, and ensures consistent application of sanctions.

Third, an effective sanctions system cannot exist without holding violators accountable. The strict and fair application of penalties, as well as informing the public about such cases, strengthens trust in the sanctions mechanism and serves as a preventive signal to anyone considering circumvention. Visible accountability reinforces confidence that sanctions are a serious, effective, and just security instrument.

Sanctions – a sustained tool of preassure

Head of Macroeconomic Research and Strategy at the Kyiv School of Economics Benjamin Hilgenstock pointed out: “We must build a system that clearly shows Putin and Russia - the longer the war continues, the harsher the consequences will be. Sanctions have already deprived Russia of the opportunity to earn approximately 100 billion euros in the energy sector. We must also be able to influence other countries that have not imposed sanctions against Russia and consider additional global-level measures.

Concluding the discussions of the conference, it was emphasized that sanctions are not the only instrument but rather a strategic mechanism of pressure that must be maintained until the aggressor ceases hostilities and peace is restored.

“The sanctions imposed by the European Union are effective; however, their weakest point lies in the differing systems and implementation approaches across Member States. Latvia has established a centralised regime with efficient data exchange and close cooperation with the Bank of Latvia, the Ministry of Foreign Affairs, and Customs. For Latvia, this is a matter of national security, while in some other countries the approach may be relatively more relaxed,” concluded Mr. Iļjenkovs.

The conference “Guarding the Gate: sanctions, export controls & business responsibilities,” served as an important platform for dialogue among experts, policymakers, and business representatives to strengthen a shared understanding of the role and effectiveness of sanctions implementation.

Conference recording (in Latvian)

Conference recording (in English)

Since April 2024, the FIU has been the national competent authority for sanctions enforcement in Latvia.

Iveta Locāne
Head of the Communication Division
E-mail: prese@fid.gov.lv