The Latvian financial sector strongly condemns the invasion of Ukraine by Russian forces and is ready to implement the entrusted duties for imposing of financial sanctions.
The stability of the financial sector in Latvia is not jeopardized by the imposed sanctions, as over the last years fundamental changes have been made, improving the financial crimes and money laundering prevention system, also the number of risky transactions has been reduced in the sector that is subject to the adopted sanctions.
The imposed sanctions have reinforced previous financial sanctions, restricting Russia’s access to capital markets, as well as the Russian financial system and economy in general, taking action against the major Russian banks. In practice, this means that currently payments from institutions and persons subject to these sanctions are not accepted – they are refunded, detained for checks, or frozen. Also, payments of the Russian state are frozen. If a Russian bank is not subject to sanctions, payments of private persons are processed without any significant interference; however, they are checked.
Also, strict export control is introduced in order to prevent Russia’s access to the latest technology and impact its military and industrial capabilities; as a result, it will not be possible to make payments for goods and services subject to the sanctions. Respectively, it shall be taken into account that processing of payments in the sanctioned areas will take a while or will not be possible at all.
Also, a range of representatives of the Russian elite and their family members are subject to sanctions, and their funds, if deposited in Latvian financial institutions, will be frozen and it will be impossible to make payments to these persons or receive payments from them.
Therefore, making payments to and from Belarus (additional sanctions have been imposed, considering its role in the invasion of Ukraine by Russian forces), Russia, as well as Ukrainian regions Crimea, Donetsk and Luhansk (at the moment, also Mariupol) is difficult or is impossible at all.
The payments made to Ukraine are processed by banks as a matter of priority and as fast as possible.
Currently, the financial sector in collaboration with the responsible public institutions is working actively on the introduction of procedures for the implementation of these sanctions. However, during the introduction period, approaches may differ among the sector participants, observing the scale of sanctions and the necessity to impose them immediately.
* The scope of sanctions may be extended and the situation may change in the nearest future.
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Finance Latvia Association