On 9 December 2019, the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) has imposed sanctions on Aivars Lembergs, the Ventspils Development Agency, the Business Development Association, the Latvian Transit Business Association and the Ventspils Freeport Authority.
The Ministry of Foreign Affairs recalls that pursuant to the Law On International Sanctions and National Sanctions of the Republic of Latvia and the Financial and Capital Market Regulations No 13 of 29 January 2019, “Regulations on Sanctions Risk Management”, U.S. OFAC sanctions in Latvia are observed by actors in the financial and capital market, including banks; U.S. OFAC sanctions are also observed in public procurement, in the field of public and private partnership and in the context of the European Union (EU) funds and other foreign financial aid.
The OFAC has issued General Licence No. 1 under Global Magnitsky Sanctions Regulations, which envisages a 30-day period to wind down transactions involving four blocked entities – the Ventspils Freeport Authority, the Ventspils Development Agency, the Business Development Association, and the Latvian Transit Business Association. Natural persons are currently subject to temporary freezing, during which it must be ascertained whether there are legal grounds for seizing assets or applying any other sanctions.
The United States has issued a warning that anybody who enters into financial transactions with the designated persons who have been sanctioned can also be subject to U.S. OFAC sanctions. In this light, the Latvian Ministry of Foreign Affairs requests that this additional risk be taken into account and draws attention to the fact that while sanctions are in place, difficulties may be encountered in implementing contracts already signed with persons covered by these U.S. OFAC sanctions and in particular cases it may not be possible to fulfil those contracts at all.
For further information on the U.S. OFAC sanctions, please visit the website at: https://home.treasury.gov/news/press-releases/sm849.