On 28/12/2023, the client of LINNIKOV & PARTNERS, a major credit institution based in Belarus, was informed about the decision to “unfreeze” the funds and financial instruments of its clients passed by the Bank of Latvia.
In February 2022, the Latvian correspondent bank notified our client about blocking the nominee account in connection with the possibility of the European Union restrictive measures applying to the credit organization due to its indirect corporate connection with Russian “sanctioned” persons. Notwithstanding the legal opinion submitted to the Latvian bank containing unambiguous conclusions on the absence of legal grounds for applying any EU restrictive measures to the L&P client, the decision of the credit organization was left unchanged. The subsequent attempt to obtain a license to withdraw the blocked assets by submitting a corresponding application to the Latvian national financial market regulator did not bring the expected result either, but allowed to clarify the regulator’s position on the case. Despite the exhaustive evidence of the absence of ownership and/or control by the sub-sanctioned persons, as well as the absence of the owners of the blocked assets in the “sanctions lists”, the regulator erroneously took the opposite position, however, indicating the possibility of applying for “unfreezing” the assets directly to the Latvian credit institution.
In April 2023, a letter of claim prepared by L&P‘s sanctions practice lawyers and our Latvian colleagues was sent to the Latvian credit institution demanding information about the measures taken by the bank to unfreeze assets held by the bank and its clients. In the course of further correspondence, the Latvian bank was provided with evidence confirming the possibility of unblocking the assets, after which the Latvian credit organization itself applied to the Bank of Latvia for authorization to “unfreeze” and transfer the blocked funds and financial instruments, which was granted by the regulator.
“This case was a complex multi-stage project: before achieving the unblocking of assets, it was necessary to consistently plan and implement a number of necessary preliminary actions paving the way to the final positive decision. The successful resolution of the case became possible thanks to the high level of professionalism and well-coordinated teamwork of our client’s legal service and financial unit, Latvian colleagues and attorneys of L&P’s “sanctions” practice,” notes L&P founder Alexander Linnikov and adds: “We end this calendar year with a wining streak in various jurisdictions and are optimistic about the future.“