Published: 23.11.2022 Updated: 25.07.2023

What are sanctions

Sanctions are restrictions imposed on a subject of sanctions in accordance with the laws and regulations. Sanctions are imposed by an international organisation or by a state on a state, territory, legal or natural persons or other identifiable subjects.

Purpose of sanctions

Sanctions aim to restore international peace and security and to change the behaviour of the subject of sanctions in order to achieve the objective of the sanctions. The purpose of sanctions is to restore the rule of law, to prevent any potential deterioration of the situation, as well as to put an end to the unlawful conduct of the subject of sanctions.

Sanctions to be complied with by institutions supervised by Latvijas Banka

In accordance with the legal framework on sanctions, an institution supervised by Latvijas Banka must comply with:

  • national sanctions;
  • international sanctions imposed by organisations to which Latvia is a member,
  • restrictions specified by sanctions imposed by the North Atlantic Treaty Organisation (NATO) and a Member State of the European Union, which significantly affect the interests of the financial and capital market.

According to the Law on International Sanctions and National Sanctions of the Republic of Latvia, there are five different types of sanctions that can be imposed on any subject of sanctions. The institutions supervised by Latvijas Banka are directly subject to financial restrictions, i.e. restrictions on financial instruments and financial resources which are under the ownership, possession, holding or control of the subject of sanctions, including restrictions on providing financial services to the subject of sanctions. With regard to other types of sanctions and compliance with them, the institutions supervised by Latvijas Banka must ensure that the restrictions are complied with in accordance with the scope specified by the legislation laying down the sanctions, and must assess their impact on the fulfilment of the task of compliance with financial restrictions, i.e. it may be useful to assess not only financial restrictions but also other types of sanctions. This can also help to assess and identify situations of circumvention of financial restrictions.

General information on sanctions, including their types and enforcement, listing of sanction databases and other detailed information can be found in the Sanctions section of the Ministry of Foreign Affairs website.

For a more detailed explanation and examples of sanctions and their enforcement by the institutions supervised by Latvijas Banka, please refer to the relevant chapters of Recommendations No 169 of the Financial and Capital Market Commission of 21 December 2021 "Recommendations for the Establishment of the Internal Control System for Anti-Money Laundering and Countering Terrorism and Proliferation Financing and Sanctions Risk Management, and for Customer Due Diligence".


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