EU sanctions enforcement has tightened but varies between countries - experts

RIGA - The European Union's (EU) sanctions enforcement mechanisms have become stricter over the past years, but significant differences still exist between Member States, according to the conclusions of experts at a conference organized by the Financial Intelligence Unit (FIU) on Thursday, "Guarding the border: sanctions, export controls and corporate responsibility".

During the discussion "Sanctions Enforcement Up Close", FIU chief Toms Platacis pointed out that most of the more than 600 criminal cases and more than 200 administrative proceedings for sanctions violations initiated in Latvia are related to cases detected by Customs.

"These are mainly re-export cases, as Latvia is located between Russia and Belarus, and about 80 percent of all cases involve shipments of goods coming from other European countries," the FIU chief said.

He said that the circumvention of sanctions in the Latvian financial sector is very limited due to strict supervision. Platacis pointed out that about 10 percent of all reports on suspicious transactions are related to sanctions issues. So far in 2025, more than 600 reports of potential violations have been received, and half of them involve individuals with accounts in Russian banks. According to the FIU chief, there is also a new trend - the provision of prohibited services to Russian companies and sale of luxury goods.

Turning attention to Latvia's experience, Platacis explained that it is based on close cooperation between the authorities and the financial sector, as well as reforms implemented after 2018, when Latvia almost ended up on Moneyval's gray list. This, he said, was an incentive to fix the system, which now also helps in the implementation of sanctions.

Mark Handley, partner at Duane Morris and author of the European Sanctions Enforcement blog, noted that since 2022, more than 5,500 criminal and administrative investigations into sanctions violations have been launched in Europe, including in Norway, Switzerland and the UK. More than EUR 480 million in fines have been imposed since 2017.

"The most frequent violations relate to the export of goods to Russia, both dual-use and luxury goods, as well as the import of Russian goods such as timber, caviar, oil and fertilizers. There are also cases concerning the provision of services to Russian companies, including management and legal services," said Handley.

He also acknowledged that there are significant differences between EU Member States in the disclosure of information on sanctions enforcement, which makes it difficult to assess the situation. The expert stressed that the Court of Justice of the European Union has recently recognized the right of Member States to confiscate not only illicit profits, but also all proceeds from sanctions violations, which does not constitute a violation of human rights.

The participants of the conference agreed that the effectiveness of sanctions depends directly on the ability of states to enforce them, to respond in a timely manner to circumvention attempts and to ensure strong but proportionate penalties.