Banks in Latvia freeze approximately EUR 55 million due to anti-Russian sanctions

As of 25 March there were assets worth approximately EUR 55 million frozen in banks in Latvia due to sanctions imposed by the European Union and US Department of the Treasury’s Office of Foreign Assets Control (OFAC), as reported by Finance and Capital Market Commission (FKTK).
«Last week a major increase of the frozen volume of assets came from securities,» the commission explained. A week before that – by the end of 18 March – assets worth approximately EUR 17.5 million were frozen in banks in Latvia. This means over the course of the week the frozen amount increased by EUR 37.5 million.
According to FKTK, banks in Latvia have identified three private persons who are under international sanctions and 32 legal persons who are not directly under sanctions but are under control or are owned by persons who are under sanctions.
FKTK also noted that banks have provided relevant data for evaluation. Work continues.
«The volume of frozen assets may change in the future, considering evaluations continue and finances held by high-risk clients are frozen for the duration of evaluation, and that more and more sanctions are introduced,» adds the commission.
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Previously FKTK reported that Latvia’s financial sector has implemented an approach that marks Russia as a high-risk jurisdiction. This has resulted in a significant drop of Russian deposits in Latvian banks since 2015, accounting for only 1.1% of all attracted deposits.
FKTK also mentioned that banks continue massive evaluation tasks together with clients, ensuring implementation of measures in accordance with sanctions, including analysis of transactions, beneficial owners and to prevent third parties from using Latvia’s financial sector to circumvent sanctions.
FKTK follows the latest information about sanctions, participates in the work of foreign institutions, and provides advisory assistance to financial institutions in regards to adoption of regulations related to sanctions. More complicated situations are evaluated in cooperation with other state institutions.
At the same time, FKTK points out that it does not have the authority to perform an evaluation of clients or transactions on behalf of banks, private or legal persons.
In cases when there is no sufficient information about cooperation partners of clients, or if information is unclear, the decision is made based on risk assessment, which can result in cessation of business relations or increased monitoring or limitation of transactions. It is also important to keep in mind that Russia’s war in Ukraine continues. This means there will be more sanctions.
FKTK invites residents to be patient and understand if their bank asks additional questions about their payments to or from Russia or Belarus. The goal of this measure is making sure payments are not wired to people under international sanctions or in their interest.