Q&A on sanctions against Russia and Belarus

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In view of Russia’s aggression against Ukraine and the military attack on Ukraine, the European Union and other countries continue to step up sanctions against Russia and Belarus, which will also affect payments made and received to/from Russia and Belarus.

The Financial and Capital Market Commission provides answers to frequently asked questions about the impact of sanctions against Russia and Belarus on payments and other financial transactions.

General questions on sanctions

Have new sanctions been introduced?

In response to Russia’s aggression in Ukraine, new sanctions have been introduced. The current information on sanctions imposed by the US and the EU can be followed here: https://www.fktk.lv/en/customer-protection/sanctions-on-russia-and-belarus/.

Published: 04.03.2022

Where can information be found for appropriate sanctions or to check a person on sanctions lists?

The EU sanctions map developed by the EU may be used to search information: https://www.sanctionsmap.eu/.

The tool provides information on the EU sanctions against the country concerned, legal and natural persons and restrictions on sectoral breakdown, as well as the legal framework in which the specific restrictions are contained.

The sanctions list search tool is available on the website of the Financial Intelligence Unit (FIU): https://sankcijas.fid.gov.lv/.

When searching for information with the FIU sanctions finder, please take into account:

  • In the FIU sanctions finder, the person’s record will be exactly as in the document setting out the sanctions. It is usually the original language (e.g., Arabic, Russian, Belarusian) and the transliteration in Latin letters. The representation of the given name and surname of persons in Latvian is not included in the sanctions finder.
  • The sanctions finder only reflects sanctioned entities against which the European Union, United Nations or national sanctions are directly and straightly applied: international public-sector bodies, a natural or legal person or other identifiable entities. The finder does not reflect any undertaking owned by or associated with the sanctioned entities, and family members of the sanctioned entities.
  • The sanctions finder does not reflect so-called sectoral sanctions, or restrictions on the movement of goods of strategic importance and other goods.

In addition, please use: https://www.fid.gov.lv/lv/aktualitates/sankcijas-biezak-uzdotie-jautajumi.

Information on sanctions is also available on the website of the Ministry of Foreign Affairs: https://www.mfa.gov.lv/en/sanctions.

Information on US OFAC sanctions is available at: https://home.treasury.gov/policy-issues/office-of-foreign-assets-control-sanctions-programs-and-information.

Moreover, the US OFAC sanctions list search tool may be used: https://sanctionssearch.ofac.treas.gov/.

Lursoft has established and maintains a common list of information on entities included in the sanctions lists of Latvia, the United Nations, the European Union, the United Kingdom and OFAC: https://sankcijas.lursoft.lv.

The list shall be updated on a daily basis from the primary sources to ensure access to the current information and is available free of charge to anyone entrepreneur.

Published: 23.03.2022

Where can I find additional explanations on the application of sanctions imposed by the European Union?

The European Commission has published and regularly supplements answers to the most frequently asked questions about the application of sanctions. The European Commission’s replies are available in the section Frequently Asked Questions.

General explanations on the application of European Union sanctions can also be found in the material “Restrictive measures (Sanctions) – Update of the EU Best Practices for the effective implementation of restrictive measures” prepared by the Working Party of the Foreign Relations Counsellors. Please note that these materials are general recommendations that are not complete and are designed to effectively implement European Union sanctions in accordance with applicable European Union and national law. The information material is available here.

Published: 25.03.2022

How will sanctions affect the bank's operations? What should companies take into account in order to be as prepared as possible?

Given that banks must ensure that sanctions are imposed and that the sanctions are very wide-ranging, they may have an impact on the timing of the assessment and and extend the processing and execution time of payment transactions. In situations where the payee is a client of the bank on the sanctions list, the payment will not be executed.

In addition, sanctions imposed by the European Union are directly binding not only on the financial sector but also on any person, including entrepreneurs. Those entrepreneurs cooperating with Russia or Belarus need to follow up on the sanctions imposed and to evaluate their cooperation partners (including counterparty structure and beneficial owners) in order to decide on the feasible future cooperation, to avoid the involvement of the company in transactions with sanctioned persons. If the owner structure of counterparty is complicated and non-transparent, it is impossible to verify whether the beneficial owner is the right one, etc., then we recommend the termination of business relations with that counterparty.

Companies should also take into account a ban on the in Russia (e.g., the sale, supply, transfer or export of dual-use items to any person in Russia or for the use in Russia are prohibited, as well as the sale, supply, transfer or export of goods and technologies related to the aviation sector) and Belarus (e.g., the EU has also imposed sectoral sanctions on the Belarusian oil, potassium and tobacco sectors). The movement of dual-use (strategic) goods is governed by the Law on the Circulation of Goods of Strategic Significance.

Additional information on the circulation of strategic goods may be found here:

In addition, the prohibition of the provision of technical assistance, directly or indirectly, intermediation services or other services related to goods and technology subject to prohibitions and the provision, production, maintenance and use of those goods and technologies should be assessed.

Updated: 29.03.2022

Will there be any exceptions to the applicable sanctions for entrepreneurs, as is the case with basic needs of individuals?

On 11.03.2022, the FCMC issued a general licence to credit institutions for individuals and legal entities. For legal entities, the licence provides for the coverage of business core costs to the extent that they are strictly necessary for the legal entity to continue to exist, such as taxes, State fees, compulsory State social insurance contributions.

Updated: 11.03.2022

What is the responsibility for violating sanctions?

The consequences of the breach of sanctions may have a significant impact. In accordance with Section 84 of the Criminal Law, criminal liability is provided for the violation of sanctions imposed by the United Nations, the European Union and other international organizations or for the violation of national sanctions imposed by the Republic of Latvia.

In addition, in accordance with the Law on International Sanctions and National Sanctions of the Republic of Latvia, certain persons have an obligation to carry out a risk assessment of sanctions and to establish an internal control system. According to Section 13.2 of the above Law, these persons may be subject to administrative sanctions for infringements in the field of international and national sanctions requirements.

It should be also noted that the violation of sanctions or attempts to circumvent them may pose a risk to entrepreneurs not to receive services from Latvian financial institutions, as well as to have a significantly negative impact on the company’s reputation, which may further cause problems in attracting new customers and partners for cooperation or negatively affect existing business relationships.

Published: 16.03.2022

Financial services and restrictions imposed thereto

Payments/settlements
How will payment transactions be executed in Russia and Belarus in the future? Are payments to and from Russia suspended? / How will payments to and from Russia take place?

Banking payments to and from Russia and Belarus are not prohibited in general, but due to the heavy sanctions, banks have to carry out increased and time-consuming checks and therefore payments are burdened.

We call on residents and entrepreneurs to be tolerant, as banks take measures to ensure that sanctions are actually enforced.

When establishing any relationship with the sanctioned persons, the bank may refuse to carry out the transactions. There may also be situations where the bank does not want to take on the risk inherent to the counterparty of an individual customer in Russia and/or Belarus and therefore a specific transaction or further cooperation may be refused.

Published: 04.03.2022

May Russia's aggression against Ukraine, and therefore the sanctions imposed on Russia, affect payments received from Russia?

The payments received from Russia may be affected by imposed sanctions against Russian natural or legal entities, including Russian banks.

The payments may also be affected by restrictions imposed by Russia on payments outside Russia’s territory.

Published: 04.03.2022

May any settlements be made (sent and received) in euro currency with banks in Russia that are not subject to sanctions?

Yes, it is possible, only it may take longer. Such option could be denied if Russia applies restrictions on currency transactions outside Russia’s territory.

Published: 04.03.2022

Will the customer's passport or the taxpayer's number be taken into account in the business relationship, for example, the client holds a Russian Federation passport, but is an EU country tax-payer?

The determining factor is a residence permit, not the application of the tax regime.

Published: 04.03.2022

Will the bank carry out transactions in the Russian roubles, currency conversions to/from the roubles?

Such questions should be addressed to your bank.

Published: 04.03.2022

If the cooperation partners are linked to Eastern Europe, Russia, how can this affect (limit) the future economic activities of group companies? Will transfers in RUB be restricted/terminated?

Payments received from Russia may be affected by sanctions imposed against Russian natural or legal entities, including Russian banks.

Payments may also be affected by restrictions imposed by Russia on the payments outside Russia’s territory. This applies to payments in any currency, not only in Russian roubles.

Published: 04.03.2022

Transactions with payment cards (VISA, Master card)
How about a payment card if, for example, SWIFT is no longer allowed to make payments?

In general, we recommend not relying on cards issued by Russian banks and have the cash needed for daily spending when travelling to Belarus or Russia (e.g., when travelling, truck drivers, seafarers).

Published: 04.03.2022

Will a card issued by the Russian bank be allowed to make settlements in Russia, or will they be refused in Russia?

In general, we recommend not relying on cards issued by Russian banks and have the cash needed for daily spending when travelling to Belarus or Russia (e.g., when travelling, truck drivers, seafarers).

Published: 04.03.2022

Investment services and transactions in financial instruments
Would it be possible to carry out securities operations on the securities market?

There are no restrictions on transactions on the Latvian securities market so far, while the FCMC and the securities market organiser independently follow developments in the securities market, including cyber security. The decision to terminate Moscow’s stock-exchange trading sessions comes as the decision of Russian central banks as a supervisor.

Restrictions related to sanctions, Moscow Stock Exchange and Russian-backed securities may be imposed on supervisors or market organisers by different countries (national exchanges), who carry out regular supervision of stock exchange members and stock exchange events.

Please follow public sources with regard to the imposition of sanctions and the official information of your chosen national stock exchange and supervisory authority on additional restrictions on securities transactions.

In addition, the sectoral restrictions introduced by the European Union against the Russian Federation, which prohibit financing or investment service transactions or their provision or trading in new bonds or equities or similar financial instruments, should be taken into account. Regulation: https://eur-lex.europa.eu/legal-content/LV/TXT/?uri=CELEX:02014R0833-20190709.

Updated: 16.03.2022

The EU has imposed restrictions on deposits prohibiting the acceptance of deposits from Russian nationals or natural persons residing in Russia, or legal persons, entities or bodies doing business in Russia, where the total value of deposits of the natural or legal person, entity or body exceeds EUR 100 000. Is this restriction also applicable to life insurance services where savings are made, investments made by investment management joint stock companies, as well as third pillar pension savings?

Yes, in accordance with Council Decision (CFSP) 2022/327 of 25 February 2022 amending Decision 2014/512/CFSP concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine, the above restriction on deposits also applies to all products mentioned in the question.

In addition, as from 9 March 2022, this type of restriction shall also apply to the products mentioned in the question concerning Belarus. In particular, pursuant to Council Decision (CFSP) 2022/399 of 9 March 2022 amending Decision 2012/642/CFSP concerning restrictive measures in view of the situation in Belarus and the involvement of Belarus in the Russian aggression against Ukraine, it is prohibited to accept any deposits from Belarusian nationals or natural persons residing in Belarus, or legal persons, entities or bodies established in Belarus, if the total value of deposits of the natural or legal person, entity or body per credit institution exceeds EUR 100 000.

Published: 16.03.2022

Imports and exports of goods (Russia, Belarus)

Will it be possible to import or export goods to and from Russia?

At present, there is no general ban on imports or exports of goods, but there are certain sectors and categories of goods for which any exports and/or imports of goods to Russia or Belarus are prohibited. More detailed information on specific categories of goods and technology can be found in the relevant EU Regulations, which include prohibitions on exports and/or imports of goods and technology.

Also, persons are prohibited from purchasing goods or receiving services from natural and legal persons subject to sanctions that provide for the freezing of funds and economic resources and the prohibition to transfer funds and economic resources to sanctioned persons. Persons are also prohibited from purchasing goods or receiving services from persons who are owned or controlled by persons on the sanctions lists.

In addition, the logistical conditions of the moment have to be taken into account. The airspace of several countries has been closed and the supply of goods may be problematic. It should also be noted that there are ever-new sanctions that may change the conditions in the future.

Published: 16.03.2022

Where do I look for information on the export-related restrictions on dual-use goods and technologies to Russia?

On 16.03.2022, the European Commission published replies to the most frequently asked questions relating to the export restrictions on dual-use goods and technologies laid down in Articles 2, 2a and 2b of Council Regulation (EU) No 833/2014 of 31 July 2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine. The published material can help companies to understand and apply the new export restrictions, which complement and extend the previous framework for controlling exports of dual-use products to Russia.

The answers to the most frequently asked questions published by the European Commission are available here.

Published: 25.03.2022

Cooperation with sanctioned persons

Is there the possibility to finalise the execution of contracts concluded before the sanctions were imposed?

The answer to this question will depend on exact sanctions imposed against the person, who is the other party to the contract and who is the subject of the contract. If the other party to the contract is a sanctioned person, and there are sanctions against the sanctioned person that provide for the freezing of funds and economic resources belonging to, owned, held or controlled by the sanctioned person, and the prohibition to transfer funds and economic resources directly or indirectly to the sanctioned person, such contract will not be executed.

The possibility to execute a contract or to partially execute a contract may be allowed where the relevant sanctions regime provides for any exceptions. For example, in certain cases a sanctioned person may make and receive payments resulting from commitments made prior to the inclusion in the sanctions lists. In certain cases, the supply/sale of goods and the provision of services may also be allowed, for example, where such transaction is necessary to meet the basic needs of the sanctioned person.

This also applies to the situation where the funds and economic resources of the other party to the contract belonging to, owned, held or controlled by the sanctioned person, i.e., the other party to the contract is not included in the sanctions lists. This means that you have to find out who are the owners of your counterparty, as well as the true beneficiaries and the related parties, and whether these persons are included in the sanctions lists.

In addition, it should be noted that even if your counterparty is not sanctioned, it may not be possible to make payments related to the contract concluded. A number of Russian and Belarusian banks are subject to sanctions and/or are excluded from the SWIFT system, which means that there will be no possibility of settlement with individual banks. It is also important to remember that payments to and from Russia and Belarus will take more time than usual, as banks take additional due diligence activities.

Published 16.03.2022

Under which conditions may the obligations due under the agreement that was concluded before or that arose before the date on which the person or the counterparty is included in the sanctions list be fulfilled?

The Commission has prepared information material to provide guidance on the activities needed to enable the person to decide on the fulfilment of pre-existing obligations to a certain extent when European Union sanctions are imposed against the person or the counterparty, which include the freezing of funds and economic resources and the prohibition of making funds and resources available directly or indirectly.

Pre-existing obligations are obligations due under contracts or agreements that were concluded before or that arose before the date on which one of the counterparties is included in the sanctions list.

The information material prepared by the Commission is available here.

Published: 28.03.2022

What services may be still provided to a sanctioned person?

In certain cases, the provision of services to a sanctioned person may be permitted, if the receipt of such service is necessary to ensure the basic needs of the sanctioned person.

The Financial and Capital Market Commission has issued the general licence to Latvian financial institutions, which permits financial institutions to make payments related to the coverage of basic needs or business core costs.

Published 16.03.2022

What should I do if, after the execution of the transaction, it is established that the person is on the sanctions list?

If you have carried out a transaction that is prohibited under the existing sanctions regimes, you must immediately take all possible steps to terminate the transaction, such as non-settlement, not to supply goods or other activities aimed at ensuring that the funds or economic resources are not transferred to a sanctioned person. Already earlier, the FCMC has drawn attention to the fact that business relations with Russia and Belarus are associated with increased risks, and both the FCMC and the banks have reminded to observe the ‘know your customer’ principle and to clarify their beneficial owners and related parties. In the situation where massive sanctions have been imposed against Russia and Belarus, above measures help to assess counterparties more quickly and take the necessary steps to prevent breaches or circumvention of sanctions.

Published 16.03.2022

Do employees who receive their salaries from a sanctioned company have to obtain an authorisation from the FCMC for receipt/transfer of funds to the bank account?

No, employees do not have to obtain such authorisation, the FCMC’s general licence of 11.03.2022 allows the transfer of the salary from the company subject to sanctions to the employees’ account. It should be noted that payments to be paid to one employee per month arising from the employment relationship with the sanctioned company should not exceed EUR 5000 (five thousand euro) of gross amount.

Published 22.03.2022

What are the procedures for granting the FCMC's authorisation for the execution of financial transactions (make/receive payment from a sanctioned person's account)?

If a sanctioned person is required to pay for the release of frozen funds of sanctioned persons, the sanctioned person must apply to the bank, providing the bank with information on the nature, justification and transaction supporting documents, as well as other information requested by the bank.

The bank will assess the customer’s application and the documents submitted, including assessment of compliance with the relevant European Union regulations, the requirements of paragraph 19 of the FCMC Regulations No 126 (Regulations on Sanctions Risk Management) and in line with the requirements of paragraph 20 of FCMC Regulations No 126 the bank will apply to the Commission for authorisation, providing an assessment that the service to be provided conforms to the exceptions set out in paragraph 19 of FCMC Regulations No 126. If the bank detects a suspicious transaction, it will immediately report it to the Financial Intelligence Unit in accordance with the procedures specified in the Law on the Prevention of Money Laundering and Terrorism and Proliferation Financing.

The FCMC will assess the compliance of the conditions referred to in the application with the conditions of the relevant European Union regulations and take a decision on the issuance of the authorisation.

Authorisation process

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Published 22.03.2022

How would the customer recover the funds paid for a tourism trip if the service provider is subject to sanctions and the funds are frozen, but the tourism trip was cancelled?

The customer should contact the travel company with a request for reimbursement of the funds paid for the services not provided.

The service provider, a travel company, must contact the bank in which it has an account with a request to refund the money paid by the customer. If a bank receives such request from the service provider, it shall evaluate the information and documents submitted by the travel company and, if necessary, refer to the Financial and Capital Market Commission with a request for authorisation for such reimbursement.

If the tourism service provider refuses to refund or any other dispute arises, the customer should refer to the Consumer Rights Protection Centre, which will address consumer protection issues within the scope of its competence.

Published 27.04.2022

For third-country nationals (citizens of Russia, Belarus)

What will change for citizens of the Russian Federation? What EU sanctions have been imposed against citizens of the Russian Federation?

Sanctions are imposed against certain natural and legal persons, including Russian banks, but not against all citizens of the Russian Federation as a whole. On the other hand, the transactions of citizens of the Russian Federation may be disrupted if they are sanctioned bank’s clients or have business transactions with a bank that is on the list of sanctions, or if they carry out unauthorised transactions prohibited due to the imposed sanctions.

In response to Russia’s aggression in Ukraine, new sanctions have been introduced. The current information on sanctions imposed by the US and the EU can be followed here: https://www.fktk.lv/en/customer-protection/sanctions-on-russia-and-belarus/.

Published: 04.03.2022

How can Russian residents, who do not have an account in Latvia's (European) bank, settle their accounts in Latvia?

In cash in euro or using a payment card issued by a bank other than a bank of the Russian Federation. It is not possible to settle accounts outside the Russian Federation with a payment card issued by the bank of the Russian Federation.

Published 11.03.2022

How can a Russian resident transfer money to Latvia?

Money can be transferred through the companies that provide remittance services, including several banks that are not sanctioned. It should be noted that Russia has imposed restrictions on the payments outside Russia’s territory.

Published 11.03.2022

How much can be transferred by a Russian resident to a person in Latvia?

Russia has imposed restrictions on payments outside Russia’s territory. Currently, a Russian resident may transfer a maximum of USD 5000 or equivalent in another currency per month to a person in Latvia.

Published 11.03.2022

Are any freezes of assets/account balances expected in the bank for citizens of the Russian Federation?

The freeze will only be carried out in cases where a natural person is on the sanctions list. If a natural person is included in the sanctions lists, the accounts of natural persons and legal persons under their control will be frozen.

Published: 04.03.2022

Is it possible that a citizen of the Russian Federation who is subject to sanctions submits a second passport to the bank if any?

The inclusion of a person in the sanctions list does not depend on the person’s citizenship.

Published: 04.03.2022

Will Russian citizens residing in Latvia who receive Russian pensions or benefits be able to receive them in future? And how will pension funds be transferred into Latvian bank accounts?

This is most directly related to whether or not the bank which is being used for pension payments is included in the sanctions list. Pensions are among the basic needs covered by the general license of the FCMC. If the money comes to Latvian banks, pensions will be paid. In cases where money transfers take place between several countries, a long review process in other countries should be taken into consideration as well as that this cash flow may be suspended.

The FCMC will also work with foreign counterparts to avoid sanctions against those who do not have to suffer.

Published: 04.03.2022

How will the situation be addressed if the pension or benefit does not enter? When will it be known, who will communicate it to the partners and the public? What will be the solutions then?

This is not a question within the FCMC’s competence and it is difficult to comment on this issue at the moment because there are many unknown factors: (1) whether the responsible authorities of Russia will do everything to use financial institutions that are not on the sanctions list, (2) what the reaction of correspondent banks will be and whether they will be able to influence the process, (3) what support will be provided to the Latvian state institutions if finding a solution takes more time.

Published: 04.03.2022

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