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The Court of Justice of the European Union (EU) has dismissed appeals brought by five leading businesspersons operating in Russia, thereby confirming the legality of the restrictive measures imposed on them, including the freezing of funds. Following Russia’s full-scale invasion ofUkraine in February 2022, the EU imposed sanctions on individuals operating insectors that generate significant revenue for the Russian Government. Five businesspersons – Dmitry Alexandrovich Pumpyanskiy, Tigran Khudaverdyan, Viktor Filippovich Rashnikov, Dmitry Arkadievich Mazepin, and German Khan – challenged the sanctions beforethe EU courts. After their actions were dismissed by the General Court in 2023, appeals were brought before the Court of Justice. In its judgment, the Court of Justice confirmed that the sanctions are justified. It emphasised that it is the economic sectors, rather than the businesspersons themselves, that constitute a substantial source of revenue for the Russian Government. The Court also clarified that the “influence” of businesspersons must be assessed in the context of the economic environment in which they operate, regardless of any direct link to the Russian Government. Given their significant role in the Russian economy, such persons may indirectly contribute to the financing of actions destabilising Ukraine by supporting the profitability of the sectors in which they are active. Furthermore, the Court underlined that the criteria underlying restrictive measures are lawful unless they are manifestly inappropriate. Such criteria may target categories of persons that have an objective link to a third country subject to EU sanctions, even if that link is indirect and independent of any individual conduct. In this case, the Court found an objective link between businesspersons active in sectors that are economically significant for Russia and the EU’s objective of increasing pressure on the country and raising the cost of its actions against Ukraine. Finally, the Court confirmed that restrictive measures are proportionate if they are not manifestly inappropriate for achieving their legitimate objective and do not exceed what is necessary to achieve it. These conditions were met in the present cases. The judgment reinforces the legalframework of the EU sanctions regime and confirms the approach of applying economic pressure to persons associated with strategically important sectors ofthe Russian economy. 

On 16 March 2026, the Riga City Court found the defendant guilty of participating in activities carried out by an organized group with the aim of assisting a foreign state in undermining the territorial integrity and political independence of another democratic state, as well as of violating sanctions imposed by the European Union (EU), committed by a group of persons pursuant to a prior agreement and causing substantial harm. The court sentenced the defendant to 11 years of imprisonment, three years of probation supervision, and expulsion from the Republic of Latvia, with a five-year ban on re-entry. With regard to three other defendants - two Latvian citizens and one Latvian non-citizen - the criminal proceedings were separated into a distinct case during the trial. The investigation established that the organized group ordered several dozen “Starlink Mini Kit” satellite internet systems online from the U.S. company SpaceX, which provide internet access almost anywhere. Other goods suitable for military purposes were also acquired, including weapon parts, cartridge cases, bullets, and ballistic weather meters. The total value of these goods amounted to approximately EUR 200,000. These goods were transported to Russia and sold to individuals associated with the Russian armed forces, with the knowledge that the goods were intended for use in Russia’s military attack against Ukraine. It was also known that some of these goods were subject to EU restrictions prohibiting their transfer to any natural or legal person, entity, or body in Russia. As a result of these actions, the security interests of Ukraine and the international community were significantly endangered, as substantial support was provided to Russia in carrying out its military aggression against Ukraine. No person shall be considered guilty until their guilt in committing a criminal offence has been established in accordance with the procedures prescribed by the Criminal Procedure Law. Information prepared by the Prosecutor’s Office of the Republic of Latvia.

On 14 March 2026, the Council of the European Union (EU) decided to extend targeted financial sanctions against Russia, continuing to target individuals associated with its military aggression against Ukraine. On 27 February, targeted financial sanctions against Belarus were also extended. In connection with the continuation of the sanctions regime, the Financial Intelligence Unit (FIU) reminds that the “Frozen Assets” section is constantly available on the website sankcijas.fid.gov.lv, where information is published about Sanctioned persons whose funds or economic resources are frozen in Latvia. As of March 16, 2026, assets owned, controlled or held by a total of 160 sanctioned entities have been frozen in Latvia. Of these: 23 are individuals or legal entities directly included in the sanctions list,137 are legal entities owned or controlled by sanctioned persons. The “Frozen Assets” section provides detailed information on various types of frozen assets, as well as data in Excel format on sanctioned entities for which FID has received information. Cooperation with companies in Russia is particularly high risk FIU emphasizes that any cooperation with persons directly included in the sanctions lists is prohibited. The sanctions lists also include influential Russian businessmen who own or control enterprises and economic sectors of strategic importance to Russia. In order to prevent circumvention of the sanctions restrictions, the sanctions also apply to companies owned or controlled by these persons. Therefore, cooperation with companies owned or controlled by persons included in the sanctions list is generally prohibited. Therefore, the risk of being involved in a violation of sanctions is particularly high when cooperating with merchants in Russia. To ensure compliance with sanctions, it is not enough to formally verify whether the cooperation partner is included in the sanctions list. In addition, it is necessary to assess whether the company is owned or controlled by a person included in the sanctions list. This also applies to cases where sectoral sanctions do not restrict the sale of specific goods or the provision of services to Russian persons. In targeted financial sanctions, the decisive factor is who the persons involved in the transaction are and who benefits from the transaction. The FIU further recalls that the responsibility for compliance with sanctions, as well as for assessing the appropriateness of a particular transaction or activity, remains with the individual. This applies to both targeted financial sanctions and sectoral sanctions and includes the obligation to conduct due diligence based on the available information and the applicable sanctions regulatory framework. The FIU website also provides guidelines in Latvian language for managing sanctions risks in transactions with heightened-risk countries, which provide practical recommendations for complying with sanctions and mitigating risks: Guidelines.pdf EU individual sanctions against individuals and organisations undermining the territorial integrity, sovereignty and independence of Ukraine have been in place since 2014 and cover a wide range of individuals – including senior officials, companies, oligarchs and other regime supporters. Since April 2024, the FIU has been the national competent authority for sanctions implementation in Latvia. The targeted financial sanctions are imposed in accordance with Council Regulation (EU) No 269/2014 of 17 March 2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine. Targeted financial sanctions against Belarus were imposed by Council Regulation (EC) No 765/2006 of 18 May 2006 concerning restrictive measures in view of the situation in Belarus and the involvement of Belarus in the Russian aggression against Ukraine. Targeted financial sanctions may be violated, including by conducting transactions with a person who is a subject of sanctions (directly included in the list of targeted financial sanctions or owned or controlled by a person included in the list of sanctions); by conducting transactions with a credit institution that is subject to targeted financial sanctions; by supplying goods to a merchant who then supplies them to the subject of sanctions; by conducting a transaction that indirectly benefits the subject of sanctions (for example, by leasing goods from a merchant whose owner is a subject of sanctions); by purchasing such goods from a merchant whose manufacturer is a subject of sanctions.

On February 20, 2026, a new general administrative act (General Licence) adopted by the Financial Intelligence Unit (FIU) entered into force. The new General Licence essentially retains the regulation of the general harmonisation of 27 December 2024, while clarifying and supplementing it with new categories of payments, including payments to sworn advocates, sworn notaries, state and local government institutions of the Republic of Latvia and debt recovery service providers registered in the Republic of Latvia, for the performance of which sanctioned subjects do not require a separate FIU authorisation. With the entry into force of the new general agreement, the previous general agreement of 27 December 2024 will cease to be valid. The new general agreement can be found on the FIU website.

Latvia has received an international assessment confirming the country’s effectiveness in fighting financial crime, thus strengthening financial sector integrity and contributing to safety and security of international financial system. The leading AML/CFT evaluation highlights that Latvia has a robust, well-coordinated and highly effective system to combat money laundering, terrorism and proliferation financing. On Thursday, 19 February the Council of Europe’s Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism - MONEYVAL published its report on the results of Latvia’s mutual evaluation. The report highlights that Latvia achieved high or substantial levels of effectiveness in all Immediate Outcomes (IOs), except one. Overall, the findings recognize Latvia’s significant progress and its long-term commitment to fighting money laundering and terrorist and proliferation financing. "We have eliminated high risks in the financial sector, and Latvia is a safe and reliable country for investment. This is also confirmed by Latvia's choice to be among the first countries to be assessed according to the new FATF standards. We are pleased that the government's targeted work has yielded results," says Prime Minister of the Republic of Latvia Evika Siliņa about what has been achieved.Minister for Finance of the Republic of Latvia Arvils Ašeradens: "Following the financial sector turmoil of 2018, Latvia made a deliberate political decision to implement profound structural reforms, building a transparent, secure, and internationally compliant financial sector supervisory system." Today, we have a regulatory and supervisory framework built on effectiveness, interinstitutional cooperation, and a risk-based approach. This is a crucial aspect of national security and economic competitiveness. A strong and reliable financial system boosts investor confidence. It helps mitigate reputational risks and strengthens Latvia’s position as a secure and attractive partner in the international financial system. The Financial Intelligence Unit (FIU) played a central role in this process, coordinating efforts across the country and ensuring a unified approach to identifying and understanding risks. Financial crimes are no longer viewed solely as economic offences, but as threats to national stability and security and appropriate response is given. "This evaluation sends a strong signal that Latvia is now recognised as a reliable and effective partner in the global fight against financial crime and sanctions evasion," says Head of the FIU Toms Platacis. He adds: "The real test ahead is maintaining proportionality. A mature system knows when intervention is necessary and when it is not. By applying the risk-based approach decisively while ensuring that low-risk sectors are not burdened unnecessarily, Latvia strengthens its credibility and remains fully aligned with leading international standards." The report recognizes the FIU as a highly effective institution and a global leader in international co-operation. Supported by secure and innovative co-ordination mechanisms, the FIU plays a central role in Latvia’s AML/CFT/CPF system by producing high-quality financial intelligence, leading national risk assessments, and enabling successful money laundering investigations through continuous strategic guidance, training, and inter-agency co-operation. As previously reported, on 13 June 2025, the joint FATF/MONEYVAL Plenary concluded with the adoption of Latvia’s 6th round mutual evaluation report. Latvia is the first country to be assessed under the new round of evaluations in the FATF Global network. Latvia’s evaluation assessed the measures implemented and the results achieved during the period from 11 November 2017 to 15 November 2024. About the mutual evaluation This is the leading international assessment in the field of AML/CFT/CPF, conducting ongoing peer reviews of each member to assess levels of implementation of the FATF Standards, providing an in-depth description and analysis of each country’s system for preventing criminal abuse of the financial system. Mutual evaluation of Latvia assessed the effectiveness of the country’s AML/CFT/CPF measures, and their level of compliance with the FATF Standards, at the time of an on-site visit in November 2024. The FATF (Financial Action Task Force) is an international organisation that sets and monitors standards for the prevention of money laundering, terrorism and proliferation financing (AML/CFT/CPF). MONEYVAL (Council of Europe Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism) is a committee of experts of the Council of Europe that assesses member states against FATF standards and in accordance with FATF methodology. More information: https://fid.gov.lv/en/roles-and-responsibilities/moneyval-2

The State Security Service (VDD) informs that on February 2, 2026, it requested the prosecutor's office to initiate criminal prosecution against a Latvian resident for providing unauthorized programming services to a company in Russia, violating sanctions imposed by the European Union (EU). Criminal proceedings against the person were initiated on April 14, 2025 on suspicion of the criminal offense provided for in Section 84, Part One of the Criminal Law – violation of EU sanctions. The investigation revealed that the person had been providing remote programming services to a company in Russia since 2022. In addition, the person had been receiving his salary for several months in the account of the Russian bank Alfa-Bank, which is included in the EU sanctions lists, thus providing financial resources to an entity subject to sanctions, contrary to the prohibition. The VDD emphasizes that in response to Russia's aggression in Ukraine, EU citizens are prohibited from providing programming and many other services to companies in Russia. They are also prohibited from directly or indirectly making financial funds or economic resources available to individuals and legal entities included in the EU sanctions lists. The Financial Intelligence Unit (FIU) draws attention to the fact that the provision of prohibited services to sanctioned persons or entities is one of the most frequently identified typologies of sanctions violations. In practice, such violations are often disguised as remote services or outsourcing contracts, therefore the FIU calls on financial institutions and other subjects of the law to carefully assess the compliance of such transactions with the sanctions regulation. At the same time, it is recalled that no person is considered guilty until their guilt in committing a criminal offense has been established in accordance with the procedures prescribed by law. Information: VDD

The Court of Justice of the European Union (EU) confirmed in its judgment of 5 February 2026 in case C-619/24 that the import ban on goods from the Russian Federation applies to all goods listed in the relevant annex, and it is not necessary to assess in each individual case whether the specific imports generate significant revenue for the Russian Federation. In the specific case, the EU Court of Justice answered a preliminary question submitted by the Düsseldorf Finance Court on the interpretation of Article 3i(1) of Council Regulation No 833/2014 of 31 July 2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine: “It shall be prohibited to purchase, import, or transfer, directly or indirectly, goods which generate significant revenues for Russia thereby enabling its actions destabilising the situation in Ukraine, as listed in Annex XXI into the [European] Union if they originate in Russia or are exported from Russia.” The Düsseldorf Finance Court asked this question in a case in which a Russian citizen residing in Germany purchased a second-hand vehicle in Russia and imported it into the EU. The German customs authority confiscated the vehicle on the basis of Article 3i(1). The claimant challenged the confiscation, arguing that the import of a single second-hand vehicle did not generate significant revenue for Russia, and also referred to Article 3i(3ad), which provides for the possibility of registering vehicles that were already in the EU on 19 December 2023. The Court of Justice of the EU ruled that the EU has the right to determine the goods whose import is considered to generate revenue, and it did so by including the relevant goods in Annex XXI. The ban applies automatically to all goods listed in the annex. This is also confirmed by the exceptions provided for in the regulation, such as personal use and personal effects. If the ban were limited to transactions that individually generate significant revenue, such exceptions would not be necessary. At the same time, the possibility of registration provided for in Article 3i(3ad) only applies to vehicles that are legally present in the EU. A vehicle that has been illegally imported cannot be legalised by reference to this provision. The judgment confirms that for the import ban to apply, it is sufficient that the product is included in Annex XXI and originates in Russia or is exported from Russia. An individual assessment of revenue is not necessary and is not permissible.

The Financial Intelligence Unit (FIU) and the Prosecutor General's Office organized a training and discussion at the Judicial Academy to discuss the implementation of sanctions imposed against Russia and Belarus and the criminal aspects of sanctions violations. The training was attended by 60 participants, bringing together investigators, prosecutors and judges. During the training, Marta Tilhena, Head of the FIU Sanctions Implementation Division, and Roberts Dūdiņš, Head of the Financial Intelligence Division, explained the legal aspects of sanctions restrictions, including emphasizing the role of courts in sanctions issues and introducing the most significant judgments of the Court of Justice of the European Union related to the sanctions regulation. Participants were provided with insight into the identification and detection of sanctions violations, with particular emphasis on current typologies of sanctions violations. At the same time, the lecturers emphasized the importance of inter-institutional cooperation with the FIU in the process of investigating, prosecuting and adjudicating sanctions violations. During the training, Deputy Prosecutor of the Specially Authorized Prosecutors Division of the Criminal Justice Department of the Prosecutor General's Office, Aldis Lasmanis, focused on the criminal aspects of sanctions violations, explained the peculiarities of obtaining evidence in sanctions violation cases, as well as issues of assessing the proportionality of the imposed penalties. At the end of the training, participants had the opportunity to solve practical tasks, analyzing situations of possible sanctions violations. This was followed by a useful discussion on how to improve cooperation between institutions to make the identification, proof and prosecution of sanctions violations in Latvia more effective. FIU, the Academy of Justice and the Prosecutor General's Office thank the participants for their genuine interest and active participation during the training and discussion.

How are sanctions weakening the Russian economy, and how can their impact be assessed? In this article Paulis Iļjenkovs, Deputy Head of the Financial Intelligence Unit (FIU) for Sanctions, and Benjamin Hilgenstock, Head of the Macroeconomic Research and Strategy Department at the KSE Institute of the Kiev School of Economics, analyze how sanctions are affecting the Russian economy, assess their effectiveness, and consider what changes are still needed. Sanctions are working, but there is still much work to be done Since Russia's full-scale invasion of Ukraine in February 2022, the European Union (EU) has adopted 19 rounds of sanctions against Russia, adding to measures already in place following the illegal annexation of Crimea in 2014. “Since sanctions must be renewed every six months with the unanimous consent of all EU member states, political resistance can significantly weaken their effectiveness,” says B. Hilgenstock. B. Hilgenstock adds that this explains why some member states are still importing Russian energy resources more than three and a half years after the start of a full-scale war. However, despite these restrictions, the EU has made significant progress - the unexpected agreement to ban the transport of Russian liquefied natural gas (LNG) to Europe shows that sanctions can be effectively improved . P. Iļjenkovs draws attention to additional challenges faced by companies, financial institutions and Member States. Although decisions on sanctions are taken centrally, each Member State is responsible for their actual implementation. This has led to decentralization and fragmentation of sanctions implementation at the Member State level. For example, a large number of countries have not yet introduced criminal liability for violation of sanctions in accordance with the EU Directive. Sanctions enforcement shortcomings can also occur within the borders of one country. To mitigate such a risk, Latvia has designated the Financial Intelligence Unit as the competent authority for sanctions enforcement issues. Both experts point out that the implementation of sanctions is improving, but further efforts are still needed. “For sanctions to become truly effective, targeted and long-term sustainable investments are needed,” emphasizes P. Iļjenkovs. Sanctions that have caused the greatest damage to Russia When asked which sanctions have caused the greatest damage to Russia, both experts agree that the most significant impact has been caused by restrictions targeting the energy sector. The EU embargo on crude oil and petroleum products significantly limited Russia’s access to the European market. This forced Russia to look for new buyers in other markets in early 2023, often selling oil at significant discounts, which resulted in a significant decrease in revenue. The KSE Institute estimates that Russia has lost $159 billion in potential revenue between March 2022 and August 2025 (see Figure 1).   Figure 1. Comparison of Russian and European oil prices (left) and estimates of Russian oil export losses (right). Sources: IEA Oil Market Reports; KSE Institute estimates. According to both experts, the next most important are export control sanctions on dual-use goods and other high-priority goods. Although European-origin technologies continue to find their way into Russian military equipment and evidence suggests that sanctions have not completely stopped the purchase of Western-made components through complex supply chains, such purchases often occur at significantly higher costs than under normal market conditions. B. Hilgenstock suggests that this may be due both to the large number of intermediaries in sanctions-evasion schemes and to the fact that Chinese suppliers, aware of Russia’s dependence on these technologies, charge higher prices. Financial sanctions are equally important. P. Iļjenkovs also highlights sanctions targeting Russian oligarchs, whose influence determines the Kremlin's decision-making. B. Hilgenstock, in turn, highlights the freezing of the Russian Central Bank's assets in the EU, noting that the loss of access to foreign reserves limits policy-making opportunities, promotes high interest rates, and further destabilizes the ruble. Impact of the latest sanctions on Lukoil and Rosneft In October 2025, the US Office of Foreign Assets Control (OFAC) imposed new sanctions on Rosneft and Lukoil, the two largest Russian oil companies. As B. Hilgenstock points out, the initial impact will be significant, as OFAC clearly signals the risk of secondary sanctions on foreign banks. In order to maintain export volumes, Russia will have to offer even greater discounts on the already low price of oil. How long this period will last is not yet clear, as both experts agree that the effectiveness of these sanctions will depend on how rigorously OFAC enforces them. Some exemptions have already been granted, which reduce the effectiveness of the sanctions. There is also the possibility that Russia could set up shell companies to purchase the sanctioned oil and then resell it, eliminating the names of Rosneft and Lukoil from the transactions and thus allowing banks to process the payments. Whether OFAC will take a strong stance against such potential circumvention schemes is still an open question. P. Iļjenkovs points out that Lukoil's significant presence in the European fuel retail market makes the company particularly vulnerable to the impact of sanctions . At the same time, the impact on Latvia is likely to be minimal, as Rosneft has actually been considered a subject of sanctions since 2022, taking into account the inclusion of its CEO Igor Sechin on the sanctions list, while Lukoil's business presence in Latvia is small. The protracted war and the resilience of the Russian economy After more than three and a half years, Russia's aggression against Ukraine continues, raising questions about what the duration of the war reveals about the state of the Russian economy. B. Hilgenstock points out that waging a prolonged war outside one’s own territory is extremely expensive, although an authoritarian regime can sustain such aggression for a long time. At the same time, Russia is not invincible – it failed to achieve its initial military goal of capturing Kiev in three days, and its progress on the front has been slow and very costly. “The duration of the war shows that the pressure applied so far has not been sufficient – ​​it must be intensified,” concludes B. Hilgenstock. Sanctions have significantly weakened Russia's economy and its war-making capabilities , but their long-term effectiveness depends on continued coordination, consistent implementation, and political will. Maintaining and intensifying this pressure is crucial for the international community to effectively support Ukraine and constrain Russia's ability to continue its aggression. The conversation took place during the conference "Protecting the Border: Sanctions, Export Control and Corporate Responsibility" organized by FIU, which 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. Conference recording (in Latvian) Conference recording (in English) Sanctions lists and other useful information available on the FID website. Since April 2024, the FIU has been the national competent authority for sanctions implementation in Latvia.