Russia’s full-scale war against Ukraine has been going on for almost four years, and sanctions are proving their effectiveness – they have significantly weakened, made it more expensive and more difficult for the aggressor to continue the war. Therefore, it is essential to continue the implementation of unified and consistent sanctions to maintain pressure on Russia and strengthen international security. This conclusion was made at the international conference “Protecting the Border: Sanctions, Export Controls and Corporate Responsibility” organized by the Financial Intelligence Unit (FIU), which brought together more than 120 participants from more than 20 countries - including experts from the European Union (EU), the United Kingdom, the United States and Canada.
Sanctions as a security instrument, not just a political tool
Opening the conference, Baiba Braže, Minister of Foreign Affairs of the Republic of Latvia, emphasized that sanctions are not just a formal political gesture, but a real instrument for stopping the war.
“Sanctions are working and the data clearly shows that sanctions are having a significant impact on the Russian economy. Sanctions by the EU, the US, the UK and other international partners are effective and must be further strengthened to contain Russia and its co-aggressors. Together with our allies, we must continue to align sanctions against Russia’s energy sector and financial institutions, as well as continue to work on aligning sanctions against Russia and Belarus. Sanctions must also be targeted at entities in third countries that help circumvent sanctions and support aggression. We will continue to target sanctions on Russia’s energy exports, shadow fleet and its supporters until the aggression is stopped,” the minister said.
The FIU head Toms Platacis also reminded that since the beginning of the war, FIU's main task has been to prevent Latvia's financial system from being 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 importance of sanctions and their practical implementation has increased significantly. An immediate response has turned into long-term sustainability - this is also evidenced by the rounds of sanctions imposed by the EU, with each subsequent one reaching increasingly important sectors of the Russian economy in order to critically reduce the likelihood of continuing to finance the war," said the FIU head Toms Platacis, emphasizing that the implementation of sanctions has become a strategic national security issue.
Paulis Iļjenkovs, Deputy Head of the FIU, acknowledged that the centralization of sanctions enforcement in Latvia has been successful: “The decision to designate the FIU as the competent authority for sanctions enforcement has been successful, our country's practice is evaluated as a good example also elsewhere in Europe, namely, one institution provides explanations and ensures a uniform practice for applying sanctions. For sanctions to be truly effective, coordinated action and dialogue are necessary at the national and international levels.”
Effective sanctions are based on unified action, consistency and accountability
Sanctions against Russia are one of the most important tools to weaken the aggressor's capabilities and strengthen international security. Their effectiveness depends on three fundamental principles: close international cooperation, consistent implementation, and real accountability.
First, an internationally coordinated sanctions policy among Western partners is a prerequisite for this instrument to work. Only united action can ensure that the aggressor cannot exploit the gaps between the regimes of different countries and that sanctions have maximum effect, both economically and politically.
Secondly, consistent enforcement of sanctions is the responsibility of each country. Entrepreneurs must be aware of their risks and ensure compliance with the rules, while the state must create a clear and understandable system that allows companies to act accordingly. In Latvia, such a unified approach is provided by the FIU, which, as the competent authority in the field of sanctions enforcement, provides explanations, coordinates activities and ensures uniform practice in applying sanctions.
Third, an effective sanctions system is inconceivable without holding violators accountable. Strict and fair application of penalties, as well as public information about these cases, strengthens trust in the sanctions mechanism and serves as a deterrent signal to anyone considering circumventing sanctions. Visible accountability creates confidence that sanctions are a serious, effective and fair security instrument.
Sanctions – a long-term pressure mechanism
Benjamin Hilgenstock, head of the Department of Macroeconomic Research and Strategy at the Kyiv School of Economics, said: “We need to create a system that clearly shows Putin and Russia that the longer the war continues, the more severe the consequences will be. Sanctions have already deprived Russia of the opportunity to earn about 100 billion euros in the energy sector. We need to be able to influence other countries that do not apply sanctions against Russia, and we should also think about additional measures at the global level”.
At the conclusion of the conference, it was emphasized that sanctions are not the only tool, but a strategic pressure mechanism that must be maintained until the aggressor ceases hostilities and peace is restored.
"The sanctions imposed by the EU have an effect, but their weak point is the different systems and implementation approaches of the member states. Latvia has established a centralized regime with effective 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 other countries the approach may be relatively more relaxed," concluded Paulis Iļjenkovs.
The conference “Protecting the Border: Sanctions, Export Controls and Corporate Responsibility” served as an important platform for dialogue between experts, policymakers and business people to strengthen a common understanding of the importance of sanctions and the effectiveness of their implementation.
