Sanctions are restrictive measures imposed pursuant to international public law and applicable to states or other subjects of law [e.g., terrorists, persons accused of war crimes] designated by an international organisation or a state. Sanctions seek to bring about a change in the conduct of a state to ensure or restore peace, security and the rule of law in the state targeted by sanctions. Consequently, the aim of sanctions is not to punish but to prevent a possible deterioration of the situation.
Types of sanctions:
financial restrictions – restrictions in respect of financial instruments and financial resources which are in the ownership, possession or under control of the a subject of international public law, a natural or legal person, or another identifiable subject (hereinafter – subject of sanctions);
civil restrictions – restrictions in respect of all types of transactions with other economic resources if these transactions result in change of the owner, or the purpose of these transactions is to make available cash funds or other type of economic resources for the subject of sanctions;
restrictions on admission – the subject of sanctions is prohibited from entering and residing in Latvia or crossing the territory of Latvia in transit;
restrictions on circulation of strategic and other goods – prohibition to sell, supply, transfer, export strategic goods or other goods specified in legislation to the subject of sanctions, or otherwise alienate those goods, or allow access to them;
restrictions on provision of tourism services.
At the same time, certain restrictions can be imposed on provision of services related to a type of sanctions, or on provision of any other services set out in a European Union regulation, which can differ case by case (for instance, ban on services related to arms, or to equipment and software for internet and telephone communications).
The right to adopt sanctions with the aim of restoring peace and security in a region or preventing threat to international peace and security has been granted to the following entities:
- the United Nations Security Council (UNSC), pursuant to Chapter VII of the UN Charter;
- the EU, i.e., Member States being integrated into the European Union (EU) and delegating some of their powers to the EU in a number of areas, the EU is taking measures to introduce sanctions adopted by the UNDP.
- Other international organisations too, for instance, the Organisation for Security and Cooperation in Europe (OSCE), can adopt sanctions.
- To achieve the above-specified goals, sanctions can also be set by individual countries.
The legal basis for the United States Security Council sanctions is Chapter VII of the UN Charter, incl. Article 41. The legal basis for EU sanctions is Article 29 of the Treaty on European Union and Article 215 of the Treaty on the Functioning of the European Union.
Latvia introduces the UN-adopted sanctions via EU legislation; however, when required, the Cabinet of Ministers can issue regulations implementing the sanctions adopted by the UN. In addition, the EU can also supplement UN sanctions (for instance, in the case of Iran), and it can introduce unilateral sanctions (for instance, in the case of Belarus, Syria, and Ukraine).
In Latvia, sanctions are introduced pursuant to:
- Law On International Sanctions and National Sanctions of the Republic of Latvia
- Cabinet Regulation No. 468 “Procedures for the Execution of International and National Sanctions”
- Relevant decisions by the Council of the EU (binding for competent institutions);
- Council Regulations (directly applicable by all legal and physical entities);
- Law on the Prevention of Money Laundering and Terrorism Financing (sanctions on persons involved in terrorist financing);
- Cabinet Regulation No. 138 “On countries and international organisations that have prepared lists of persons that are suspected of participating in terroristic activities or creating, holding, moving, using or distributing weapons of mass destruction”.
The implementation of sanctions is also regulated by other laws and regulations in the field of customs, immigration, the movement of strategic goods, by the Civil Procedure Law, etc.
Penalty for the violation of international or national sanctions – a maximum custodial sentence of 8 years – is determined pursuant to Section 84 of the Criminal Law.
Pursuant to the Law On International Sanctions and National Sanctions of the Republic of Latvia, the Cabinet may, upon its initiative, as well as on the basis of a proposal of the Minister for Foreign Affairs or a recommendation of the National Security Council, impose national sanctions.
Institutions responsible for the introduction of sanctions in Latvia:
The Ministry of Foreign Affairs informs competent authorities about persons subject to sanctions. The MFA is also responsible for measures of control over export of strategic goods (arms embargo), namely, each transaction with strategic goods – military and dual use – requires a licence issued by the Committee for Control of Goods of Strategic Significance (the committee is acting under the Foreign Minister’s supervision). The licence is not issued if the respective recipient country is subject to an arms embargo. In the assessment of economic impact, it should be borne in mind that an arms embargo is imposed in the interests of national security, and in such cases safeguarding international peace and security is a priority. For detailed information on the circulation of strategic goods, see https://likumi.lv/ta/en/id/159963-law-on-the-circulation-of-goods-of-strategic-significance .
Other competent institutions are:
- Finance and Capital Market Commission – financial restrictions on the subjects of sanctions;
- Ministry of the Interior – travel bans;
- Office for Prevention of Laundering of Proceeds Derived from Criminal Activity – financial restrictions on terrorists and terrorist financers;
- Customs Authority of the State Revenues Service – control over the movement of goods;
- Committee for Control of Goods of Strategic Significance – restrictions on strategic goods.
National sanctions imposed by the Republic of Latvia
Cabinet Regulation No. 419 of 25 July 2017 “Regulations on the imposition of national sanctions of the Republic of Latvia in respect of subjects related to the nuclear programme and the political regime of the People’s Democratic Republic of Korea” came into force on 1 August 2017. The regulation imposes national sanctions by the Republic of Latvia in order to prevent the undermining of Latvia’s foreign-policy-related interests and national security and to combat the production, storage, movement, use, or proliferation of weapons of mass destruction related to the PDRK’s nuclear programme and its political regime.
Cabinet Order No. 390 of 31 July 2017 “On the imposition of financial restrictions of the Republic of Latvia in respect of subjects related to the nuclear programme and the political regime of the People’s Democratic Republic of Korea” came into force on 1 August 2017. The order sets financial restriction on a Thai passport holder, TSAI Hsein Tai, a.k.a. Alex Tsai H.T. (born 8 August 1945).
Cabinet Order No. 137 of 29 March 2018 “On the imposition of financial restrictions of the Republic of Latvia in respect of subjects related to the nuclear programme and the political regime of the People’s Democratic Republic of Korea” came into force on 29 march 2018. The order sets financial restriction on North Korean passport holder, Ri Song-Hyok (LI, Cheng He) (born 19 March 1965) and on Ruskor International Company Ltd.
Under Section 5 of the Law On International Sanctions and National Sanctions of the Republic of Latvia, if financial restrictions are imposed in relation to a subject of sanctions, participants of the financial and capital market of Latvia have a duty to take the following action:
- to freeze all financial resources and financial instruments, which are in the ownership, possession or under control of the subject of sanctions;
- to deny access for the subject of sanctions to financial resources and financial instruments;]
- not to provide the financial services specified in international or national sanctions to the subject of sanctions.
Sanctions adopted by the UNSC and the EU:
Sanction regimes established by the UNSC and resolutions on those regimes: http://www.un.org/sc/committees/
Consolidated UNSC Sanctions List of individuals, entities and other groups: https://scsanctions.un.org/consolidated/
Consolidated List of EU sanctions (financial restrictions): https://eeas.europa.eu/headquarters/headquarters-homepage/8442/consolidated-list-sanctions_en
- The Consolidated List has been drawn up and is maintained to facilitate the application of financial sanctions that are binding both for the public and private sector.
- The Consolidated List is an advisory aid and a search tool, only the publications of legal acts in the EU Official Journal being legally binding. http://eur-lex.europa.eu/homepage.html?locale=lv
- As all the sanctions adopted by the UN are transposed into EU law, the Consolidated List includes financial restrictions set by both the EU and the UN that are binding throughout the entire EU jurisdiction.
“Sanctions Map” designed by Estonia
On 29 September 2017, during the Tallinn Digital Summit, the Ministry of Foreign Affairs of Estonia presented the “EU Sanctions Map” devised by the Estonian Presidency of the Council of the European Union. The map is an interactive online tool to share up-to-date information digitally, in a user-friendly fashion, on sanction regimes worldwide set by the European Union (EU) and the United Nations (EU). In the conclusion of the Estonian EU Presidency, the EU Sanctions Map was handed over to the European Commission fur further maintenance and updating.
The EU Sanctions Map offers a centralised system of recording sanctions, presenting the EU and UN sanctions regimes in a detailed and comprehensive manner as an easy way for companies and private individuals to obtain information they need. This map is especially useful for businesses since the EU and its Member State institutions receive thousands of inquiries from companies seeking to ascertain whether their deals and transaction are in compliance with the current legal framework.
The sanctions map specifies concrete types of sanction, contains direct links to legislation or resolutions whereby a specific sanction has been adopted, as well as providing a comprehensive search mechanism and detailed explanations, for instance, which goods are subject to an embargo. The Sanctions Map is a tool providing anyone interested with up-to-date information concerning sanctions and restrictive measures within the regimes established by the EU and the UN.
Guidelines on the implementation of sanctions:
- EU Best Practices for the effective implementation of restrictive measures http://data.consilium.europa.eu/doc/document/ST-7383-2015-REV-1/en/pdf
- Guidelines on implementation and evaluation of restrictive measures (sanctions) in the framework of the EU Common Foreign and Security Policy http://register.consilium.europa.eu/doc/srv?l=EN&f=ST%2011205%202012%20INIT
- New elements on the notions of ownership and control and the making available of funds or economic resources http://register.consilium.europa.eu/doc/srv?l=EN&f=ST%209068%202013%20INIT