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The Financial Intelligence Unit (FIU) provides additional information in relation to media reports on the FIU’s decision on 1 November 2024 to release from freezing fertilizers owned by affiliated companies of Dmitry Mazepin, a Russian citizen subject to international sanctions, and stored at the terminal of SIA “Riga fertilizer terminal”. The FIU informs that the FIU authorisation to release certain frozen fertilizers for auction was granted to prevent a potential environmental risk posed by the frozen fertilizers and is only valid if the conditions set out in the FIU authorisation are met. The FIU also draws attention to the fact that all funds acquired from the auctions will be frozen in the bailiff's account in the Republic of Latvia if the auctions of the fertilizers are successful. Dmitry Mazepin, as the sanctioned person, will not benefit from the auction of the frozen fertilizers and the auction is not being conducted in the interests of Dmitry Mazepin. During the frozen fertilizer auctions, both the auctioneers and participants are obliged to comply with the international sanctions binding in Latvia. Therefore, the frozen fertilizers cannot, under any circumstances, be transferred to other sanctioned entities as part of the auctions.

The general authorisation of the Financial and Capital Markets Commission which became effective on 27 July 2022 and has been applied until now will expire on 31 December 2024. The general authorisation allows financial institutions to make payments related to the provision of basic needs or basic business expenses of a sanctioned person. In order to ensure continuity in the implementation of sanctions, the Financial Intelligence Unit of Latvia (FIU) has issued a new general administrative act “Regarding Determination of Authorised Payments” which will enter into force on 1 January 2025. The decision aims to ensure that persons not targeted by international sanctions against the Russian Federation and the Republic of Belarus are not influenced by them unduly. At the same time, it reduces the administrative burden for payees whose transactions with sanctioned persons have an objective legal basis. The new decision taken by the FIU clarifies the types of payments and applies to sanctioned persons, credit and financial institutions, as well as sworn bailiffs and service providers. Main regulations The FIU has listed the categories of payments which may be made by sanctioned persons without a separate authorisation for a sanctions exemption;Payments are to be made to credit and financial institutions registered in the Republic of Latvia in accordance with the specified conditions;Individual payments above the limits will require individual authorisation from FIU Latvia;In the course of their duties, sworn bailiffs will be able to make certain payments without additional authorisations. Payment categories The decision defines payment categories for both natural and legal persons. These include, but are not limited to: payments for basic daily needs (e.g. food, utilities, medicine);taxes and mandatory State fees;rent and mortgage payments (provided the contracts were signed before the sanctions were imposed);payments for routine holding of the frozen economic resources. Reporting obligation Sanctioned persons and sworn bailiffs will be required to submit quarterly reports to the FIU on the payments made. These reports must be submitted within two weeks following the end of the quarter, together with supporting documents. For more information, see General licence.

On 16 December 2024, the 15th set of restrictive measures against the Russian Federation was adopted. The focus of this package is to keep cracking down on Russia’s “shadow fleet”, preventing sanctions evasion, and designating individuals and entities to sanctions lists, in particular the Russian military and industrial complex. For the first time, the European Union (EU) imposes restrictive measures (travel ban, asset freeze, and prohibition to make economic resources available) on a number of Chinese individuals and entities. Key elements of the 15th sanctions package Anti-circumvention measures As Russia continues to look for ways to evade the Oil Price Cap, the EU strengthens restrictive measures to help prevent such evasion. This package targets 52 new vessels from Russia’s “shadow fleet”, increasing the total number of such listings to 79. These vessels are banned from EU ports and from receiving services from EU natural or legal persons. These vessels have been found to be engaged in high-risk shipping practices when transporting Russian oil, in firearms deliveries, grain theft, or supporting the Russian energy sector. These sanctions significantly increase the cost to Russia of using the “shadow fleet” and reduce the number of vessels capable of transporting Russian oil. Updated sanctions lists The sanctions lists include 84 additional listings, including 54 individuals and 30 entities, responsible for actions undermining the territorial integrity, sovereignty, and independence of Ukraine. The lists include Russian military companies that manufacture aircraft parts, drones, electronics, engines, and other military components, as well as a number of senior managers in companies active in the Russian energy sector. Restrictive measures imposed against Chinese individuals and entities For the first time, the EU has imposed restrictive measures on seven Chinese individuals and entities (one natural person and six entities) who facilitated the circumvention of EU sanctions or provided critical technology to the Russian military industry. Trade restrictions The sanctions lists also include 32 new companies from Russia, China, Serbia, Iran, India, and the United Arab Emirates that support Russia’s military and industrial complex. Protecting the interests of EU operators The new regulations protect EU companies from unlawful lawsuits in Russia and make it easier for EU Central Securities Depositories to comply with obligations. More information* in the Official Journal of the EU: https://eur-lex.europa.eu/oj/daily-view/L-series/default.html *To be published soon.

Irrespective of the destination of the supply of goods included in the European Union (EU) Common Military List, the provision of a brokering service to an economic operator in Russia is a violation of sanctions. The Court of Justice of the EU (Court of Justice) ruled in Case C-351/22 Neves that a brokering transaction constitutes a breach of the prohibition contained in Article 2(2)(a) of Council Decision 2014/512/CFSP of 31 July 2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine (Decision 2014/512), irrespective of the destination of the supply of goods, because a service is either directly or indirectly provided to an economic operator in Russia. In its judgment, the Court of Justice states that Article 2(2)(a) of Decision 2014/512 must be interpreted as meaning that the prohibition on the provision of brokering services laid down in that legal norm applies even when the military goods which are the subject of the brokering transaction have never been imported into the territory of a Member State. The judgment is available here: https://curia.europa.eu/juris/document/document.jsf?text=&docid=289926&pageIndex=0&doclang=LV&mode=lst&dir=&occ=first&part=1&cid=4484728

In order to ensure that everyone can promptly receive information on the imposition, amendment, or revocation of the United Nations (UN) Security Council sanctions, we encourage you to subscribe for notifications using the link provided by the Ministry of Foreign Affairs of Latvia. In addition, you can also subscribe using a QR code: Pursuant to Section 11, Paragraph 1.1 of the Law on International Sanctions and National Sanctions of the Republic of Latvia, after a resolution of the UN Security Council on the imposition, amendment, or revocation of sanctions has been adopted, the Ministry of Foreign Affairs shall immediately notify this information to the Financial Intelligence Unit of Latvia and the supervisory authorities referred to in Section 13 of the Sanctions Law and publish the information on its website. Information on the adoption, amendment, or revocation of the resolutions is published in the official gazette Latvijas Vēstnesis not later than on the next working day. There is also a section on the website of the Ministry of Foreign Affairs entitled “UN Security Council sanction” where relevant announcements and other information are published. For up-to-date information on matters related to sanctions implementation, including information on the imposition, amendment, or revocation of international and national sanctions, see the website of the Financial Intelligence Unit of Latvia.

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.

The European Union sanctions imposed against Russia include the prohibitions on supply of various services and software to the Russian government or to legal persons, entities or bodies that have been established in Russia. As of 1 October, the exception which allowed the supply of prohibited services and software to subsidiaries established in Russia and owned by the European Union, the European Economic Area (EEA), Switzerland and partner country companies is no longer in force. These prohibitions are laid down in Article 5n of Council Regulation (EU) No 833/2014 of 31 July 2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine1 (Regulation (EU) No 833/2014). According to the abovementioned regulation, the Russian government or legal persons, entities or bodies established in Russia are prohibited, either directly or indirectly, to: provide accounting, auditing, including statutory audit, bookkeeping services or tax consulting services, or business and management consulting or public relations services;provide architectural and engineering services, legal advisory services and IT consultancy services;provide market research and public opinion polling services, technical testing and analysis services, and also advertising services;sell, supply, transfer, export, or provide software for the management of enterprises and software for industrial design and manufacture as listed in Annex XXXIX to Regulation (EU) No 833/2014;provide technical assistance, brokering services, or other services related to the abovementioned services and software;provide financing or financial assistance related to the abovementioned services and software. In accordance with Article 5n(7) of Regulation (EU) No 833/2014, the prohibitions on supply of certain services and software were not applied until 30 September 2024 if such services and software were intended for the exclusive use of legal persons, entities or bodies established in Russia that are owned by, or solely or jointly controlled by, a legal person, entity or body which is incorporated or constituted under the law of a European Union Member State, a country of the EEA, Switzerland, or a partner country.2 As of 1 October 2024, the abovementioned exemption provided for in Article 5n(7) of Regulation (EU) No 833/2014 shall no longer be applicable. Henceforth the supply of the abovementioned services and software to subsidiaries established in Russia requires authorisation from the competent authority in accordance with Article 5n(10)(h) of Regulation (EU) No 833/2014. The competent authority may authorise the supply of such services and software to the subsidiary established in Russia under such conditions as it deems appropriate. Companies incorporated in Latvia are required to obtain authorisation from the Financial Intelligence Unit of Latvia (FIU) in order to provide the prohibited services to subsidiaries established in Russia. The application addressed to the FIU can be submitted either in writing or electronically by sending an e-mail to sankcijas@fid.gov.lv. Information on the procedures for submitting the application for authorisation is available here. 1The consolidated version is available here: https://eur-lex.europa.eu/legal-content/LV/TXT/HTML/?uri=CELEX:02014R0833-20240913 2 Partner countries listed in Annex VIII to Regulation (EU) No 833/2014

On 8 October, the Council of the European Union established a new framework for restrictive measures in response to Russia’s destabilising actions abroad. This new framework will allow the European Union (EU) to target individuals and entities engaged in actions and policies by the government of the Russian Federation, which undermine the fundamental values of the EU and its Member States, their security, independence, and integrity, as well as those of international organisations and third countries. From now on, the EU will be able to address a variety of hybrid threats, such as: the undermining electoral processes and the functioning of democratic institutions;threats against and sabotage of economic activities, services of public interest or critical infrastructure;the use of coordinated disinformation, foreign information manipulation and interference (FIMI);malicious cyber activities, the instrumentalisation of migrants, and other destabilising activities. The decision, based on a proposal by the EU High Representative for Foreign Affairs and Security Policy Josep Borrell Fontelles, is part of the EU’s response to the continued campaign of hybrid activities by Russia, which has recently increased through new operations in the territory of Europe. Under this newly established framework, those designated will be subject to an asset freeze and EU citizens and companies will be forbidden from making funds available to them. In addition, natural persons will also be subject to a travel ban, which will prevent them from entering or transiting through EU territories. Publication by the Council of the European Union.

In order to help businesses identify attempts to circumvent sectoral sanctions against Russia and ensure compliance with export control regulations, the G7 countries and the European Union have jointly developed and published the guidelines “Preventing Russian Export Control and Sanctions Evasion: Updated Guidance for Industry”. These guidelines help to ensure the implementation of sanctions, mitigate reputation-related risks, and reduce liability risks. The guidelines are important for participants in international trade that are subject to compliance with the sanctions imposed by the European Union or the G7 countries. The guidelines include the following key points: 1The Common High Priority List The list of common high priority items includes goods and technologies that are important for the development, production, use of Russian military goods or that have been found in Russian weapons on the battlefield. The list identifies goods by their CN codes and is divided into several categories/levels, including microelectronics, electronic goods (e.g. related to wireless communications) and components, mechanical and other components, as well as production and quality testing equipment for electrical components, circuit boards and modules, high technology products, etc. “Red flag” indicators The guidelines identify dozens of signs that indicate a possible circumvention of sanctions. These “red flags” include, for example, the emergence of new or unrecognised business partners with a particular interest in the common high priority items on the list, inconsistencies or deficiencies in documentation and/or classification of goods, downgrading or splitting goods to avoid export bans or customs controls on luxury goods, etc. The guidelines provide guidance on how to recognise attempts to disguise the ultimate recipient of goods and what conduct or information provided by a customer, business partner should be regarded as suspicious. Best practices Provides specific steps to take in cases where signs of sanctions evasion and risk indicators have been identified. Such steps include checking the sanctions lists against the persons involved in the transactions, conducting customer due diligence, including on the end-users of the goods, to ensure that the goods are not being diverted to sanctioned countries or sanctioned persons. An analysis of risk indicators and signs of sanctions evasion is also carried out to determine whether these signs can be sufficiently and convincingly explained. If such assurance cannot be obtained, the guidelines recommend refraining from the transaction and informing the relevant authorities. Summary of sanctions lists and explanations In order to help businesses carry out more effective due diligence of their customers and business partners, the guidelines include a summary of links to sanctions lists of individual G7 countries and previously published explanations on sanctions implementation matters. The publication highlights that sanctions have succeeded in limiting Russia’s access to goods important for the military industry, as well as reducing Russia’s ability to finance the war against Ukraine. At the same time, Russia is using deceptive tactics to acquire critical goods that it is banned from acquiring. It is therefore essential that companies and all involved parties, including exporters, financial institutions, and logistics service providers, recognise attempts to divert goods to Russia and put in place measures to mitigate the risks of sanctions circumvention. The full English text of the guidelines is available here. The Latvian translation of the guidelines is available here.