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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.

In Case C-109/23 Jemerak, the Court of Justice of the European Union (Court) ruled that authentication of a purchase contract by a sworn notary does not constitute a legal advisory service within the meaning of Article 5n(2) of Council Regulation (EU) No 833/2014 of 31 July 2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine (Regulation No 833/2014) because the sworn notary is performing his or her statutory duties. In its judgment, the Court points out that the actions performed by a sworn notary in order to execute an authenticated real estate purchase contract (e.g., transfer or purchase contract fee to the seller’s account) do not constitute a legal advisory service within the meaning of Article 5n(2) of Regulation (EU) No 833/2014. In addition, the Court points out that the prohibition in Article 5n(2) of Regulation No 833/2014 on the provision of legal advice to legal persons incorporated in the Russian Federation does not apply to interpreting services provided by an interpreter during certification to assist a representative of a legal person incorporated in the Russian Federation who is not fluent in the national language of the certification procedure. The judgment of the Court of Justice of the European Union is available here: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A62023CJ0109

On September 12, 2024, the Parliament of the Republic of Latvia passed amendments to the Road Traffic Law (Law1), prohibiting vehicles registered in the Republic of Belarus from participating in road traffic within the territory of the Republic of Latvia. By adopting these amendments, the legislature aligned these restrictions with the existing prohibition on vehicles registered in the Russian Federation from participating in road traffic. The Law provides only two derogations under which the Financial Intelligence Unit may grant authorization for entry into the European Union with a vehicle registered in the Republic of Belarus, when crossing the border of the Republic of Latvia: A person with mobility impairments driving their own specially equipped vehicle registered in the Republic of Belarus may enter for the purpose of visiting a spouse or a direct-line relative residing in the Republic of Latvia;The Minister of Foreign Affairs may request that an application for entry into the Republic of Latvia be considered in special cases related to national interests. The derogations outlined in the Law comply with the restrictions specified in Article 1ra(1) and the derogations specified in Article 1ra(5) of Council Regulation (EC) No 765/2006 of 18 May 2006, concerning restrictive measures in view of the situation in Belarus and Belarus' involvement in the Russian aggression against Ukraine.2 This means that authorizations for entry into the European Union by crossing the border between the Republic of Latvia and the Republic of Belarus will only be granted by the Financial Intelligence Unit in the cases specified by the Law. Applications that do not meet the legal criteria will not be considered by the Financial Intelligence Unit. Authorizations for entry into the European Union by crossing the border between the Republic of Latvia and the Republic of Belarus, which have already been granted by the Financial Intelligence Unit, will remain valid until their specified expiration date. New authorizations will be issued by the Financial Intelligence Unit only in the cases outlined by the Law. The amendments to the Law stipulate that vehicles registered in the Republic of Belarus, which are already in the territory of the Republic of Latvia, must leave the country or be registered in accordance with regulatory procedures no later than October 31, 2024. If these actions are not taken within the specified time period, the vehicle will be confiscated in accordance with the provisions of the Law. 1 Available: https://titania.saeima.lv/LIVS14/saeimalivs14.nsf/webSasaiste?OpenView&restricttocategory=691/Lp14 2 Available: https://eur-lex.europa.eu/legal-content/LV/TXT/?uri=CELEX%3A02006R0765-20240701

In accordance with the Law on International and National Sanctions of the Republic of Latvia, the Financial Intelligence Unit (FIU) publishes on its website information received from persons on sanctioned persons whose funds and economic resources whose funds and economic resources are frozen in Latvia. Pursuant to Section 23 of the Regulation of the Cabinet of Ministers No 184 “Procedures for the Proposition and Implementation of International and National Sanctions", within 30 days after the publication of the information, the FIU shall assess whether the implementation of sanctions was carried out in accordance with the applicable laws and regulations. In total, by 31.07.2024, the FIU has concluded, as a result of assessment, that the freezing of funds and economic resources of 31 persons has not been carried out in accordance with the requirements of the laws and regulations governing sanctions: #Name and Registration NumberCountry of RegistrationDate of the FIU verification1AS "Euro Rail Trans", registration No 40103520476Latvia03.06.20242SIA "MARITIME REGISTER OF SHIPPING" registration No 40003250467Latvia03.06.20243SIA “Anulatrans”, registration No 40003431947Latvia03.06.20244INTERGRAIN S.A., registration No B175745Luksemburga03.06.20245JSC Tander, registration No 2310031475Russia03.06.20246MARITIME REGISTER OF SHIPPING (UK) LTD, registration No 03222610United Kingdom03.06.20247PHOSAGRO TRADING SA, registration No CHE-107.384.794Switzerland03.06.20248TOSHKENT METALLURGIYA ZAVODI, registration No 304574612Uzbekistan03.06.20249MAARSCHALL GROUP B.V., registration No 8182316Netherlands11.06.202410LEGION AO, registration No 1065003027462Russia11.06.202411SKYVEST TRADING LIMITED, registration No HE269979Cyprus11.06.202412GRUPPA KOMPANII SPIRTNOI OOO, registration No 1157746437793Russia11.06.202413ATLANT INC, registration No 100010198Belarus27.06.202414BELARUSIAN UNIVERSAL COMMODITY EXCHANGE OJSC, registration No 190542056Belarus27.06.202415BELGOSSTRAKH, registration No 100122726Belarus27.06.202416Belintertrans Baltic UAB, registration No 302513951Lithuania27.06.202417Belintertrans-Germany GmbH, registration No HRB 12382Germany27.06.202418BELPOCHTA RUE, registration No 101015738Belarus21.06.202419BTLC STATE ENTERPRISE, registration No 191184235Belarus27.06.202420Byelpromimpeks JSC, registration No 100088681Belarus27.06.202421VITEBSKOBLAVTOTRANS OOO, registration No 300029557Belarus27.06.202422NZGA OAO, registration No 500235715Belarus03.07.202423RUE BELTELECOM, registration No 101007741Belarus03.07.202424RUE HMC BELARUSIAN GLASS COMPANY, registration No 591035628Belarus11.07.202425PAPER MILL OF GOZNAK UE, registration No 600017868Belarus11.07.202426JSC RUCHAIKA, registration No 200048573Belarus11.07.202427OAO GRONITEKS, registration No 500046539Belarus11.07.202428INTER RAO UES PJSC, registration No 2320109650 shares in a security account of a non-sanctioned natural person*Russia11.07.202429SANATORIJA BELORUS VIESOJI ISTAIGA, registration No 110070044Lithuania31.07.202430Foundation “Riga Jurmala Music Festival”, registration No 40008283962Latvia31.07.202431RFCL S.AR.L., registration No B176899Luksemburga31.07.2024 * The FIU determined that the freezing of INTER RAO UES PJSC shares in the securities account of a non-sanctioned natural person was not justified, because shares owned by the natural person are not considered to be owned, controlled or held by INTER RAO UES PJSC and therefore are not subject to the asset freezing obligation. At the same time, the FIU would like to point out that in accordance with the assessment of the FIU, INTER RAO UES PJSC is considered to be a sanctioned person, because it is controlled by sanctioned persons (Igor Ivanovich SECHIN, Dmitry Evgenevich SHUGAEV). Information on sanctioned persons whose funds or economic resources are frozen in Latvia is maintained in the data tables published by the FIU until FIU receives information that the frozen funds or economic resources of the sanctioned person have been released from freezing, for example, based on a binding decision issued by the FIU. Information on all sanctioned persons whose funds or economic resources are frozen in Latvia, including cases where in accordance with the assessment of the FIU, the freezing of funds or economic resources is not justified and the funds or economic resources should be released from freezing, is available on the website https://sankcijas.fid.gov.lv/en/sanctioned-persons.

The Financial Intelligence Unit of Latvia has published the methodological material “Indicators of Sectoral and Targeted Financial Sanctions Evasion”. This methodological material is an updated version of the 2022 guidance material “Indicators of Russia-Related Sanctions Evasion”. Since Russia’s war of aggression against Ukraine began on 24 February 2022, the EU has imposed extensive and unprecedented sanctions against Russia, with a total of 14 rounds of sanctions adopted at the time of creating this material. Individuals are increasingly looking for new ways to breach or circumvent sanctions. Thus, this updated material includes up-to-date information on the sanctions framework, including the extended sanctions against Belarus, information on newly identified typologies of sanctions evasion, as well as information on trends of trade flows. The methodological material has been developed in cooperation with the Office of the Prosecutor of the Republic of Latvia, the State Security Service, Latvijas Banka, Tax and Customs Police Department of the State Revenue Service, National Customs Board of the State Revenue Service, and seven Latvian credit institutions, i.e. Swedbank AS, Luminor Bank AS Latvian Branch, SEB banka AS, Citadele banka AS, BluOr Bank AS, Rietumu Banka AS, Signet Bank AS. Individuals are encouraged to familiarise themselves with the updated material and to use it for risk-based sanctions compliance. “Indicators of Sectoral and Targeted Financial Sanctions Evasion”

In view of the involvement of the Republic of Belarus in the unprovoked and unjustified war brought by the Russian Federation against Ukraine, on 29 June 2024, the Council of the European Union imposed additional restrictive measures targeting the Belarusian economy. These restrictive measures are aimed at imposing sanctions that are already imposed against the Russian Federation, thereby limiting the evasion of sanctions imposed against the Russian Federation as a result of the high degree of integration between the Russian and Belarusian economies. The new sanctions include trade restrictions, a ban on the supply of certain services, restrictions on transport and logistics, and also anti-circumvention measures that will affect various sectors of the Belarusian economy. Briefly on the essentials. Anti-circumvention measures: European Union exporters have the obligation to include in their future contracts a “Belarus exclusion clause” prohibiting the re-export to the Republic of Belarus or re-export for use in the Republic of Belarus of common high priority items and technology, firearms and ammunition. In addition, European Union exporters have to make sure that their subsidiaries also comply with the “Belarus exclusion clause”;The obligation for European Union exporters exporting common high priority items to third countries other than those listed in Annex Vba to Regulation (EU) No 765/2006 to put in place a risk-appropriate control mechanism that can identify, assess, and mitigate the risks associated with the export of these items to the Republic of Belarus. In addition, European Union exporters have to make sure that their subsidiaries also comply with the abovementioned obligation. The transit of the following goods through the territory of the Republic of Belarus shall be prohibited: Dual-use goods and technology, goods and technology which could contribute to the strengthening of the military and technological capacity of the Republic of Belarus or to the development of its defence and security sector;Goods which could contribute in particular to improving the industrial capacity of the Republic of Belarus (Annex XIX to Regulation (EU) No 765/2006);Transit through the territory of the Republic of Belarus of goods and technology suitable for use in aviation or the space industry and firearms exported from the European Union (Annex XVII to Regulation (EU) No 765/2006);Firearms and ammunition exported from the European Union, regardless of their origin. Import/export measures: Gold originating in Belarus and exported from the Republic of Belarus to the European Union or to any third country after 1 July 2024 (gold listed in Annex XXI to Regulation (EU) No 765/2006);Diamonds, if they originate in the Republic of Belarus or are exported from the Republic of Belarus to the European Union or any third country (diamonds and products incorporating diamonds listed in Parts A, B, and C of Annex XXIX to Regulation (EU) No 765/2006);Mineral products, if they originate in the Republic of Belarus or are exported from the Republic of Belarus (listed in Annex VII to Regulation (EU) No 765/2006).Crude oil products, if they originate in the Republic of Belarus or are exported from the Republic of Belarus (listed in Annex XXIII to Regulation (EU) No 765/2006);Goods which allow the Republic of Belarus to diversify its sources of revenue (e.g. coal, helium, etc.) if these goods originate in the Republic of Belarus or are exported from the Republic of Belarus (listed in Annex XXVII to Regulation (EU) No 765/2006). Restrictions on services: Prohibition to provide the following services to the Republic of Belarus, its government, its public authorities, corporations, or agencies, or any natural or legal person, entity or body acting on their behalf or at their direction: accounting services;auditing, including statutory audit services;bookkeeping services;tax consulting services;business and management consulting services;public relations services. Logistics/transport measures: Prohibition on the carriage of goods within the territory of the European Union by means of trailers or semi-trailers registered in the Republic of Belarus, including if the tractors of such trailers or semi-trailers are trucks registered in other countries;Prohibition of European Union companies registered after 8 April 2022 whereof 25% or more is owned by a natural or legal person of the Republic of Belarus from carrying out road haulage operations in the European Union, including in transit. Financial measures: It is prohibited to acquire new or extend existing participation in any legal person, entity, or body incorporated or constituted under the laws of the Republic of Belarus or any third country and operating in the energy sector in the Republic of Belarus;Introduction of the possibility for companies established in the European Union to create a “firewall” to ensure that a sanctioned entity that controls or owns a company established in the European Union does not benefit in any way, thus allowing the respective company to continue its business. Measures to protect European Union companies: Natural and legal persons of the European Union Member States shall be allowed to receive compensation from natural and legal persons of the Republic of Belarus for damage caused to them.