On 18 October of this year, the President of Latvia proclaimed amendments to the Law on International Sanctions and National Sanctions of the Republic of Latvia (Sanctions Law) that were adopted on 10 October.
The amendments clarify the terms used in the Sanctions Law (funds, economic resources, freezing of funds, freezing of economic resources) in order to align the regulation with the terms used in European Union (EU) and international law. The unification of the interpretation of concepts will ensure that the Latvian national legal framework corresponds to international standards for the prevention of money laundering and the financing of terrorism and proliferation of weapons of mass destruction.
The amendments also provide that the Financial Intelligence Unit of Latvia (FIU) may issue a general authorisation allowing persons subject to EU sanctions to make certain payments without having to obtain an authorisation from the FIU each time. These are basically compulsory payments from which the sanctioned persons are not exempt, e.g. taxes and duties, wages for a minimum number of employees, as well as utilities and other payments to secure coverage of basic needs, which are not limited by the sanctions. The general harmonisation will reduce the administrative burden by allowing faster receipt of payments from sanctioned persons to the State Revenue Service, local governments, utility providers, and other persons who are not sanctioned but who would be allowed to receive payments from sanctioned persons in any case. These procedures are currently envisaged by the general agreement of the Financial and Capital Markets Commission issued on 27 July 2022 and valid until 31 December of this year.
The amendments also provide for the right of the FIU to request and receive information necessary for the performance of its functions from any person obliged to comply with and implement international and national sanctions, thus improving and making more effective the implementation of sanctions.
The FIU is the competent authority in Latvia for the implementation of international and national sanctions of the Republic of Latvia, ensuring centralised and effective implementation thereof.
Finally, the amendments exempt from any liability persons who, in good faith, have frozen funds and economic resources or refused to make them available on the basis of the sanctions legislation, unless such action was taken negligently.
The amendments to the Sanctions Law will enter into force on 1 November 2024.