Sanctions are restrictive measures established by governments and international institutions in respect of certain countries, particular persons, or specific activity, for example, provision of some services, delivery of goods, etc.
Example: The bank is prohibited from providing any services (opening an account, performing payments, etc.) to the persons included in the sanctions lists or to the entities owned or controlled by such persons.
Information is available at the website of the Financial Intelligence Unit of Latvia: https://sankcijas.fid.gov.lv/sankciju-mekletajs.
Example: The bank is prohibited from executing the client’s payment or a payment from the client’s partner if the transaction involves goods that are prohibited to trade and deliver.
Information is available at the website of the Republic of Latvia State Revenue Service (https://itvs.vid.gov.lv/): to look up whether sanctions are imposed on particular goods, use the “Search” form under “Measures” and enter the required details – TARIC code of the commodity and the origin/dispatch country.
The sanctions imposed by the UN Security Council and directly applicable regulations of the European Union (EU) are mandatory in the Republic of Latvia. According to the Law on International Sanctions and National Sanctions of the Republic of Latvia, all individuals and companies registered in the Republic of Latvia must comply with the sanctions.
As JSC “Rietumu Banka” is registered and licensed in the Republic of Latvia, it is obliged to adhere to the UN and EU regulations as well as the regulations of the Bank of Latvia, which stipulate additional duties regarding compliance with sanctions, and the guidelines on compliance with sanctions published by the Financial Intelligence Unit of Latvia.
In addition to the UN, EU, and Latvian regulations, JSC “Rietumu Banka” complies with the U.S. sanctions, pursuant to the Law on International Sanctions and National Sanctions of the Republic of Latvia.
JSC “Rietumu Banka” is a licensed credit institution rendering financial services in the territory of the Republic of Latvia, and therefore client servicing is governed by the respective binding laws and regulations, which is also set forth in the Terms and Conditions of JSC “Rietumu Banka” and Client Agreement (Clause 7).
Rendering services to the clients, JSC “Rietumu Banka” complies with the requirements of sanction regulations and therefore has to ascertain that the clients’ transactions do not involve a violation or circumvention of sanctions. Moreover, other financial institutions, including foreign ones, are engaged in execution of the clients’ transactions, and thus the transactions of the clients of JSC “Rietumu Banka” must be duly scrutinized before executing the clients’ orders.
By signing the certification and delivering it to the bank, the client confirms that the same has been informed about the sanction requirements and undertakes to comply therewith, also ensuring that the client’s transactions meet the requirements of the laws and regulations. The practice of signing the certification of obligation to comply with the sanctions is also introduced by financial institutions of other countries, enabling more efficient cooperation with clients and precluding violation or circumvention of sanctions.
The “Client Certification of Obligation to Observe National and International Sanctions” is intended for all clients of JSC “Rietumu Banka”, and it must be signed prior to establishing the relationship.
JSC “Rietumu Banka” encourages its clients to obtain and verify the information about their cooperation partners and the areas of their partners’ operations before starting business relationship and during the relationship; special attention should be paid to the transactions involving persons from the countries and territories subject to sanctions. Thus, the client will be able to make sure that the transactions with the particular partner do not contravene the sanctions laws and regulations.
Punishments for non-compliance with international sanctions are stipulated in Section 84 of the Criminal Law of the Republic of Latvia.