Main conclusions and a summary of the conference “EU Sanctions Against Russia: Implementation, Effectiveness and Future”

12.12.2022

On December 1, the Financial Intelligence Unit of Latvia (FIU Latvia) organised the conference “EU Sanctions Against Russia: Implementation, Effectiveness and Future”. The aim was to bring together relevant authorities, high level experts and senior practitioners from the public sector and key representatives from the private sector to share their experience and relevant information relating to the effective implementation of sanctions against Russia.

This year, the conference was organised in cooperation with the Ministry of Foreign Affairs of the Republic of Latvia. It gathered over 60 participants in person and over 1000 participants online throughout the day from more than 28 countries This event generated unprecedented interest, making it the best attended event that FIU Latvia has hosted.

 

The main conclusions:  

 

  • The role of financial institutions in ensuring sanctions compliance has grown over the last two decades. And continues to grow from year to year.
  • The representatives of the private sector emphasized that the continuously increasing use of public-private partnership (PPP) formats to combat crimes, of which sanctions evasion is just one, is a stable way forward.
  • From the point of view of financial institutions there needs to be synergy between three main elements for their work to be effective: know your risks, know your customer and ensure that your internal control systems are managed properly.
  • The development and the growth in the use of sanctions globally has significantly affected the work done by various consultants within the private sector. Issues of ethics often arise as sanctioned individuals have difficulty in finding quality representation to challenge the claims against them which further raises the question of the right to fair trial and representation.
  • The conference expressed a need for an IT tool for easy verification of authorisations for exceptions and derogations issued by other MS. A banking regulatory authority in member state A should be able to easily verify whether the regulator in member state B has indeed issued an authorisation that is being claimed. This information is exchanged through various means, but a central tool is needed for optimisation purposes. This would help identify attempted sanctions evasion cases by not just working harder, but also working smarter.
  • Although sanctions regimes and the restrictions that they put in place are growing in complexity, there is clear dedication from all the relevant stakeholders to ensure that they work. Successful implementation at all levels of public and private sector levels is what ensures their effectiveness.
  • One of the most important messages that carried through most of the discussions at the conference was a call for a unified approach on sanctions implementation amongst the Member States of the EU.
  • Latvia has significant exposure in regards to sanctions violations because of Latvia's geographic location and considerable trade ties with Russia. However, Latvia is a leading example in sanctions implementation in the EU and has experience that they can share. During the conference FIU Latvia presented a study of indicators that may be indicative of sanctions evasion or attempted sanctions evasion. These indicators may be found here.
  • There is a need for ensuring that all efforts presented by the various stakeholders are focused on reaching the overarching goal of the sanctions. Furthermore, there needs to be a clear evaluation of what sanctions are introduced by balancing the effort needed to implement them (for all parties involved in the process) and the effects they will have, in this case, on the targeted country of Russia in reaching the goal of stopping their aggression towards the sovereign country of Ukraine.
  • Although, the speakers at the conference outlined multiple challenges and difficulties in implementing the unprecedented amount of sanctions against Russia, they still stressed that their difficulties are insignificant in comparison to what Ukraine and its citizens have to face on a daily basis.

One of the responsibilities of the FIU Latvia is combatting of circumvention of national and international sanctions, or attempts at circumventing financial restrictions. The FIU Latvia hosts conference on the subject of sanctions for the fourth year, providing a platform bringing together leading experts from academia, business, government, international organizations and NGOs, to promote innovative thinking, challenge conventional wisdom, and reduce the gap between public and private sector actors.

 

This year the conference gathered international (Estonia, Norway, UK and USA) and Latvian high-level speakers from the private sector, public sector and various international institutions such as the European Commission, the US Department of Justice, the Office of Foreign Assets Control ("OFAC") of the US Department of the Treasury and Europol.

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