In the context of the sanctions imposed by the EU and US Department of the Treasury Office of Foreign Assets Control (OFAC), banks in Latvia have frozen funds worth approximately EUR 11.5 million, as reported by Finance and Capital Market Commission (FKTK).
According to FKTK, banks in Latvia have identified two private persons who are directly under sanctions and 26 legal persons who are not directly included on the list of sanctions but have ownership rights or control over those legal persons. This is the reason why finances of those people have been frozen.
FKTK also reports banks have provided relevant information for assessment. Investigation continues.
“The volume of frozen assets will likely increase in the future, seeing as though the investigation continues. Transactions on accounts of certain high-risk clients have been put on hold for the duration of investigations and more sanctions are on the way,” FKTK representatives stress.
Previously FKTK reported that Latvia’s financial sector had implemented an approach under which Russia was considered a high-risk jurisdiction. Russian deposits in Latvian banks have shrunk significantly since 2015 because of that. 1.1% of all frozen finances consist of Russian money.
FKTK also notes that banks together with their clients continue performing large-scale investigations to ensure the function of sanctions, as well as analysis of transactions and beneficial owners to ensure sanctions work and to prevent the use of Latvia’s financial sector to circumvent sanctions or provide people under sanctions with financial services.
FKTK follows incoming information regarding sanctions, participates in the work of foreign institutions, as well as provides advisory support to financial institutions in relation to successful implementation of sanctions.
More complicated situations are evaluated with assistance with other state institutions, attempting to find solutions by assessing different related factors.
At the same time, FKTK turns attention towards the fact that it cannot perform evaluation of clients or transactions on behalf of banks, legal or private persons. In situations when there is not sufficient information about cooperation partners or clients or if information is insufficient, the decision needs to be made based on risks assessment, which may result in a full cessation of transactions, increased monitoring or tight restrictions. It is also important to keep in mind that Russian-Ukrainian war continues, and it is likely there will be more sanctions in the future.
FKTK invites residents to understand if banks ask additional questions about transactions to or from Russia or Belarus. The purpose of this additional measure is making sure no payments are wired to persons under sanctions. (BNN/Business World Magazine)
