Centralizing the policing of sanctions could serve as a model for other EU countries.
When your most important ally swoops in and closes your third-largest bank while calling it a “money laundering institution,” it’s time to roll up your sleeves and get to work.
That’s exactly what Latvia did when confronted by the U.S. Treasury Department in 2018: It cleaned up its banking sector and passed strict anti-money laundering laws. If that American slap on the wrist hadn’t arrived six years ago, Latvia “would have been in a much more difficult position to enforce sanctions after Russia’s invasion of Ukraine,” Paulis Iļjenkovs, the country’s top financial investigator, told POLITICO.
In an approach that is unique within the European Union, Latvia has now designated the Financial Intelligence Unit (FIU) that Iļjenkovs runs as the single central authority for applying and enforcing sanctions imposed by the EU in response to Vladimir Putin’s war on Ukraine.
Across the bloc, meanwhile, these tasks are spread among some 160 national agencies. The fragmented approach reflects the fact that while the EU has jointly agreed on 13 rounds of Russia sanctions — with a 14th in the works — its 27 member countries are individually responsible for putting them into practice.
This is the best summary I could come up with:
If that American slap on the wrist hadn’t arrived six years ago, Latvia “would have been in a much more difficult position to enforce sanctions after Russia’s invasion of Ukraine,” Paulis Iļjenkovs, the country’s top financial investigator, told POLITICO.
In an approach that is unique within the European Union, Latvia has now designated the Financial Intelligence Unit (FIU) that Iļjenkovs runs as the single central authority for applying and enforcing sanctions imposed by the EU in response to Vladimir Putin’s war on Ukraine.
Latvia, its economy and population dwarfed by eastern neighbor and former occupier Russia, also narrowly avoided being put under strict monitoring by the Financial Action Task Force (FATF), an international money laundering watchdog.
ABLV — the bank implicated by the U.S. Treasury’s Financial Crimes Enforcement Network — provided a safe haven for financing North Korea’s weapons programs and large-scale corruption in Russia.
The first half of 2018 was rough on Latvia: Five days after ABLV was cut off from the dollar market, Latvian investigators announced a bribery probe into the president of the central bank, Ilmārs Rimšēvičs.
The European Commission has floated the idea of centralizing sanctions implementation at the EU level, suggesting that an institutional counterpart to Washington’s Office of Foreign Assets Control — a kind of Euro-OFAC — could take a stronger lead across the bloc.
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