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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.

On December 15, the European Union (EU) member states agreed to include nine new individuals involved in the operation of the “shadow fleet” on the sanctions list, while on December 18, several “shadow fleet” vessels were added to the sanctions list. These vessels participate in the sale of Russian-origin oil and other sanctioned products, thus providing a significant source of revenue for the Russian government. The sanctions list was expanded to include 41 Russian “shadow fleet” vessels, which are banned from accessing ports and locks of member states, as well as being denied various maritime transport-related services. These vessels have been transporting Russian-origin crude oil, petroleum products or mineral products and have engaged in irregular and high-risk shipping activities. A total of 605 vessels have been subject to sanctions to date. The list of targeted financial sanctions includes five individuals and five legal entities involved in the operation of the “shadow fleet” vessels. These individuals are mainly associated with shipping companies registered in the United Arab Emirates. The list also includes individuals associated with Russia, Vietnam and Pakistan. In order to combat sanctions circumvention more effectively, the EU Council has decided to implement additional sanctions related to the "shadow fleet" outside the usual sanctions package regime. More information about the “shadow fleet” ships included in the sanctions list. More information about individuals included in the targeted financial sanctions list.

On 12 December 2025, the Administrative District Court (Court) rejected the application of a legal entity to remove it from the list of sanctioned entities maintained by the Financial Intelligence Unit (FIU). The Court found that the FIU's actual actions in this case were justified and lawful. At the same time, it should be noted that the judgment is a first instance decision and may be appealed in accordance with the procedure established by law. In its judgment, the court assessed whether the criteria of ownership and control in relation to a person included in the European Union (EU) sanctions list were met in relation to the applicant. This Court's judgment confirms the FID's practice in enforcing sanctions and contributes to mitigating the risks of sanctions circumvention. The Court concluded that, in accordance with the EU sanctions framework and best practices, the applicant is subject to restrictive measures. In the opinion of the FID, the applicant is indirectly owned by an undertaking controlled by a person included in the sanctions list, therefore such an undertaking is considered to be an entity controlled by a person included in the sanctions list, whose funds and economic resources are subject to freezing. The Court has found the FID's conclusions to be well-founded. FID recalls that the EU Targeted Financial Sanctions Regulation, as amended by the 19th sanctions package, contains definitions for the terms “ownership” and “control”.1 The definition of the aforementioned terms strengthens legal certainty and promotes uniform practice in the EU Member States, making these terms legally binding. It is important to emphasize that the definitions incorporated in the regulation correspond to the definitions explained in EU best practices, thus the basic principles of the application of the terms have been preserved unchanged in practice. Sanctions lists and other useful information available on the FIU website. Since April 2024, the FIU has been the national competent authority for sanctions implementation in Latvia. 1 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 Article 1(i) and (j)

The Latgale Regional Court has found a travel consultant guilty of organizing tourist trips to Crimea in violation of European Union sanctions. The court sentenced the person to 100 hours of community service, and the company she represented was fined 10.5 thousand euros. The first instance court had previously acquitted the person, but the regional court overturned this verdict. Currently, cassation proceedings have been initiated in the case, and the date for its consideration has not yet been set. The criminal proceedings were initiated in connection with the prohibition of providing services directly related to tourism activities in Crimea and Sevastopol set out in a regulation of the Council of the European Union. The regulation stipulates that such commercial activities are considered a violation of sanctions. We remind you that violations of international and Latvian sanctions may result in criminal and administrative liability - imprisonment, forced labor, or a fine. The Financial Intelligence Unit (FIU) states that no person is presumed guilty until proven guilty in accordance with the procedure established by law. Sanctions lists and other useful information available on the FIU website . Since April 2024, the FIU has been the national competent authority for sanctions implementation in Latvia.

Latvian and Dutch experts are strengthening cooperation to more effectively detect and investigate violations of international sanctions. This fall, representatives of both countries met in The Hague and Riga, sharing experience and methods that help strengthen financial security in sanctions matters. Recognizing Latvia's role as the guardian of the EU's external border, in September this year, representatives of the Financial Intelligence Unit (FIU), Customs Administration of the State Revenue Service (SRS), the Tax and Customs Police Administration of SRS, and the State Security Service were invited to visit the Dutch Ministry of Finance's Investigation Service (FIOD) to hear about Latvia's experience, which has made investigating sanctions violations one of its priorities. During the visit, representatives of both countries shared their experiences, methods and suggestions on how to detect, investigate and hold accountable sanctions violations. The Netherlands' competence in investigating sanctions violations is considered one of the most effective internationally. In early November, the FIU hosted FIOD representatives to continue the discussions already underway and to encourage new ideas for improving internal processes. FIOD presented the FIU with practical examples of how investigations are conducted and what are the most important aspects that need attention. During this visit, representatives of both countries were once again convinced of the importance of building close bilateral cooperation to ensure the exchange of good practices and a reliable professional partnership. The valuable experience of FIOD was also available to a wider audience at the conference “Protecting the Border: Sanctions, Export Control and Corporate Responsibility” organized by the FIU on November 6, 2025. During the conference, Ruud Leeuwendaal, Head of FIOD’s Counter-Terrorism Financing and Sanctions Group, spoke about practical cases and consequences resulting from sanctions violations during a panel discussion. Conference recording (in Latvian) Conference recording (in English)

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. Conference recording (in Latvian) Conference recording (in English)