04.08.2026 14:15
Key Sanctions Highlights in Q2 2026
SUMMARY
The
European Union (EU) has expanded its sanctions lists in response to
Russia's war against Ukraine. It has imposed sanctions on several
individuals and entities involved in the unlawful deportation and forced
transfer of Ukrainian children to Russia.The
Court of Justice of the European Union (CJEU) has clarified that assets placed
in a trust must be frozen if the sanctioned person retains the ability to
control or benefit from those assets.24
new criminal proceedings have been initiated in Latvia for violations of international
sanctions.During Q2, the Financial Intelligence Unit of Latvia
(FIU Latvia) received 359 suspicious transaction reports regarding suspected
sanctions violations or attempted sanctions
violations.Latvian
courts concluded four criminal cases involving sanctions violations, imposing
fines and ordering liquidation of a legal entity.The
Customs Board of the State Revenue Service (SRS) initiated 52 administrative
offence proceedings.FIU
Latvia has published updated guidelines "Assessment of control of
designated public officials".
Strengthening of Sanctions
On 11 May, the Council of the EU adopted sanctions
against an additional 16 individuals and seven entities involved in the unlawful
deportation and forced transfer of Ukrainian children to Russia.
According to the EU, the sanctions target persons and institutions involved in
the systematic, unlawful deportation and forced transfer of Ukrainian children,
the so-called militarised “re-education”, and unlawful adoption practices. The
sanctions apply to Russian officials and politicians, children's centres, youth
organisations, and other entities facilitating the integration of Ukrainian
children into the Russian system.
On 15 June, the Council of the EU adopted a decision
to expand
the EU's sanctions lists against Russia. The
changes include additions to the lists of natural and legal persons subject to
targeted financial sanctions in connection with Russia’s illegal war in
Ukraine, Russia’s hybrid threat activities, and human rights violations.
Notably, these additions to the sanctions list were adopted outside the EU’s
broader sanctions package.
Key Judgments of the Court of Justice of the European
Union
On 21 May, the CJEU delivered
a judgment interpreting the obligation to freeze assets under
targeted financial sanctions in relation to funds and economic resources
transferred by a sanctioned person into a trust. The CJEU ruled that assets
transferred into a trust may be regarded as owned or controlled by the sanctioned
person ns if that person retains powers enabling them to use, benefit from,
dispose of, or otherwise exercise influence over those assets, including the
ability to influence decisions made by the trustee in relation to them.
On 11 June, the CJEU dismissed the appeal
filed by Russia's National Settlement Depository (NSD)
seeking its removal from the EU sanctions list. The CJEU held that an entity's
significant role in Russia's financial system and its contribution to the
functioning of the Russian state's financial system may constitute sufficient
grounds for its inclusion on the EU sanctions list. The Court further clarified
that it is not necessary to demonstrate that the entity directly financed
Russia's military aggression or specific actions aimed at destabilising
Ukraine. Rather, it is sufficient to establish that the entity provides material
or financial support to the Russian Government or plays a significant role in
the relevant sector. As a result, the CJEU dismissed the appeal and upheld the
General Court's judgment confirming that the inclusion of Russia's NSD on the
EU sanctions list was justified and should be maintained.
FIU Key Developments
During Q2, FIU Latvia received 359 suspicious
transaction reports indicating suspected sanctions violations or attempted
sanctions violations. As in Q1, the most common cases in Q2 involved the
potential transfer of sanctioned goods to Russia through third countries, the
provision of prohibited services to legal entities established in Russia,
accounts held with banks included on sanctions lists, and the transportation of
cash to Russia. A total of 84 analytical reports concerning potential sanctions
violations were submitted to law enforcement authorities and other
institutions.
FIU Latvia continues to update the “Frequently Asked Questions”
(FAQ) section of its website regarding implementation of sanctions by
clarifying existing explanations and adding new information. The updated FAQ
section provides explanations on making payments after the end of transitional
periods, the application of import bans and transit through the EU, the
application of General License, the interpretation of contracts concluded
before the imposition of sanctions, trade in goods imported before the
imposition of sanctions, as well as restrictions on the provision of management
services to legal entities registered in Russia and Belarus.
FIU Latvia has published updated guidelines "Assessment
of control of designated public officials". The
guidelines have been supplemented in accordance with the definitions included
in EU sanctions legislation of “owning a legal person, entity or body” and
“controlling a legal person, entity or body”. Although EU institutions had
previously provided guidance on the criteria to be considered when assessing
ownership and control for the purposes of applying sanctions, these criteria
have now been legally established in Regulation (EU) No 269/2014. FIU Latvia’s
approach to the assessment of control remains unchanged.
At the end of Q2 of 2026, the following assets owned
or controlled by persons included on sanctions lists were frozen in Latvian
financial institutions and state registers:
Funds
– EUR 151.9 millionReal
estate – 103Vehicles
– 66Tractors/self-propelled
machinery – 11Watercraft
– 1Herd
– 1Trademarks
– 12
The list of sanctioned persons whose assets have been
frozen in Latvia is available here.
Criminal Proceedings Statistics in Latvia
During Q2 of 2026:
24
new criminal proceedings were initiated for international sanctions violations;criminal
prosecution was initiated in seven criminal proceedings;charges
were brought against nine natural persons;five
criminal proceedings were referred to court.
In Latvian Courts
During Q2 of 2026, Latvian courts examined four
criminal cases concerning sanctions violations. Judgments in two of these cases
have entered into force. In one case, a fine of EUR 10’100 was imposed on a
natural person, while two legal persons were subject to coercive measures – one
was ordered to be liquidated, and the other was ordered to pay EUR 17’900. In
the second case, a decision to terminate criminal proceedings entered into
force based on amendments to paragraph one of Section 84 of the Criminal Law,
which entered into force on 10 June 2025 and provide for criminal liability in
cases where the value of goods is not less than EUR 10’000.
In two further cases, the judgments had not yet
entered into force by the end of the quarter –one natural person was subject to
probation supervision for four years, while the other was sentenced to
community service.
Highlights from the Customs Board
During Q2 of 2026, the Customs Board of the SRS
initiated 52 administrative offence proceedings concerning sanctions
violations.
To prevent the movement of sanctioned goods across the
EU external border, during the second quarter of 2026, the Customs Board refused
to apply the declared customs procedures to 185 consignments. As a result, the
export of 157 consignments of sanctioned goods from the EU and the import of 28
consignments into Latvia from Russia and Belarus were prevented. Most
frequently, the refused exports concerned consignments containing spare parts
for various devices and machinery, electrical equipment and parts thereof, as
well as vehicle spare parts. Several cases were also prevented where attempts
were made to export goods declared under an incorrect Combined Nomenclature
(CN) code and whose supply to third countries is not possible because they are
prohibited from being moved in transit through the territories of Russia and
Belarus. Such goods included, for example, vehicle spare parts, iron or steel
structures and parts thereof, as well as lubricants.
In addition, during the second quarter of this year,
101 cases were identified involving attempts to export cash from the EU in
violation of sanctions prohibitions. As a result of postal consignment
controls, one violation was prevented, while in 51 cases violations by natural
persons were identified involving attempts to move sanctioned goods across the
border.
Overall, during Q2 of this year, the Customs Board prevented
338 potential violations of EU sanctions against Russia and Belarus while
carrying out customs control measures.
From 25 to 29 May, a pilot mission of the European
Union Customs Alliance for Borders (EUCAB) took place at the Terehova Customs
Control Point in the field of customs officials’ mobility and exchange. Latvia
is the first EU Member State where this new EUCAB initiative has been
implemented in practice, ensuring the full organisational process and
successful implementation of the mission at the Terehova Customs Control Point.
Example of a sanctions violation: use of a third
country to deliver goods to Russia
On 29 April, a suspected attempt to violate EU
sanctions was prevented at the Terehova Customs Control Point. A freight
vehicle operated by a carrier registered in Lithuania arrived heading towards
Russia, and the driver submitted documents for customs control concerning goods
(tumble dryers and their accessories) declared for export to Mongolia. A German
company was indicated as the exporter in the customs declaration.
During the
inspection, a second set of documents was found containing different
information, including the recipient of the goods in Russia and a higher value
of the goods. During an in-depth examination, torn documents bearing the
carrier’s stamp were also found, and it was established that some of the
declared goods were not actually present in the cargo compartment.
During the inspection, suspicions arose that the
actual recipient of the goods was a Russian company, meaning that the EU export
restrictions may apply to part of the consignment. The materials have been
submitted for assessment of whether to initiate criminal proceedings.
About the Quarterly Publication
FIU Latvia publishes a quarterly summary of the most
significant sanctions developments and statistics to provide the public with
regular and transparent information on the application and compliance with
sanctions in Latvia. The summary has been prepared using information available
to FIU Latvia, as well as data provided by the Prosecutor General’s Office, the
Court Administration, and the Customs Board of the State Revenue Service.
