Latvia FIU clarifies control tests for non-listed Belarus and Russia entities

RIGA, July 6, 2026 — Latvia’s Financial Intelligence Unit published an updated paper setting out its current approach to the “control” test under targeted financial sanctions, focusing on cases where a designated public official may be deemed to control a non-listed public authority or state-owned company. The FIU said the July 2026 update mainly reflects amendments made in October 2025 to EU Regulation 269/2014, which added definitions of “owning” and “controlling” to the legal text.

The paper says Latvia found inconsistent treatment of this issue in practice, particularly involving Belarusian state-owned companies and public authorities. As of April 1, 2024, the FIU became Latvia’s competent sanctions authority, and it said some prior asset freezes were not carried out in line with sanctions rules. Those cases were mostly linked to Belarusian state-owned companies or public authorities where possible control by a sanctioned high-level Belarusian official had been interpreted too broadly. The FIU said the value of assets later released was only 0.001% of the total value frozen in Latvia.

The guidance makes clear that control can be established where a designated official has concrete powers over an entity, such as appointing or removing management, using the entity’s assets, or controlling shareholder decisions. As examples, the FIU said assets linked to the Belarus President Property Management Directorate were correctly frozen because the Belarusian president can establish or abolish the body, appoint its leadership and decide on the use of its assets. The FIU also said several Belarusian state-owned wood companies were properly treated as controlled after a presidential decision transferred their shares to another state-owned entity, showing Aliaksandr Lukashenko’s unilateral power over ownership changes and shareholder decisions.

At the same time, the FIU said control should not be presumed simply because Lukashenko appoints ministers or the leadership of core public authorities. It said that does not automatically mean he controls all ministries, all ministry-supervised state companies, the Belarus central bank or the Council of Ministers within the meaning of sanctions law. The paper stresses that targeted financial sanctions are not meant to place an entire country or its core public functions under asset-freeze restrictions absent additional factors.

The FIU’s table of examples lists entities whose assets are frozen in Latvia as of July 6, 2026, including Belorusskaia Lesnaia Kompaniia OAO, GOMELDREV JSC, MOSTOVDREV JSC, MOZYRSKIY DOK OAO, the Belarus President Property Management Directorate and two Latvia-registered entities. The paper says its principles also apply to Russian public authorities and state-owned companies, but it notes that the document is guidance on the FIU’s current approach rather than an official legal interpretation.