The risk of anti-Russian sanctions being breached in Latvia is very high, said the head of Strategic Analysis Department of the Office for Prevention of Laundering of Proceeds Derived from Criminal Activity (FID) Paulis Iļjenkovs at a seminar organised to discuss the risks of circumvention of sanctions on Thursday, the 2nd of March.
This can be explained with both Latvia’s geographical location and the Russia’s historical role in Latvia’s economy. For example, in 2021 Russia was in the Top 5 countries with which Latvia performed various financial transactions. Even before 2021 Russia was in 4th to 5th place in terms of export and import operations, Iļjenkovs reminded.
«The risks of sanctions being breached are too high for Latvia to ignore. This is why we recommend businesses to perform risk analysis. Otherwise they may lose access to their bank account and enter criminal liability,» said Iļjenkovs.
He explained that FID has informative materials to help identify sanction circumvention risks.
For example, one such indicator is involvement in various sectors under sanctions as a mediator,
as well as sudden requests from partners to wire payments to accounts in other countries or jurisdictions that are not under sanctions.
Attempts to change beneficial owners or the ownership structure without any economic or legal justifications may also indicate risks of sanction circumvention.
Iļjenkovs added that
last year FID received reports of 281 suspicious deals possibly involving circumvention of European sanctions.
For comparison: there were 12 such reports in 2021 and 13 in 2020.
Most often FID receives reports of suspicious deals from credit institutions. The number of reports received from accountants is beginning to go up as well. This year FID expects to receive reports about sanction circumvention from auditors as well.
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