European Sanctions and Illicit Finance Monitoring and Analysis Network (Euro SIFMANet)

Much focus is placed on discerning the impact sanctions are having on Russia, but EU member states must first ensure robust implementation, writes Gonzalo Saiz Erausquin.

Sanctions are long-term working tools, not like switches that turn off the economy like a light bulb, so their impact on Russia is only beginning to manifest, Tom Keatinge, director of the Financial Crimes and Security Research Centre of the British security and defence think tank RUSI (The Royal United Services Institute), told ERR in a statement.

RIGA - Latvia's stance in relation to sanctions against Russia is very serious and determined, said Tom Keatinge, Director of the Centre for Financial Crime & Security Studies (CFCS) at The Royal United Services Institute (RUSI), in an interview with LETA. "Of the countries we have visited, you are the most determined ones. Not only in words, but also deeds. There were no questions you people could not answer," he said.

Beyond adding ever more products, entities and people on the list of sanctions, Europe should also work on implementation and enforcement. To make sanctions work in practice, Europe must urgently start to dismantle financial secrecy that currently allows corrupt officials and businesspeople to circumvent sanctions and hide ill-gotten gains."

...Latvia is among those countries that "both bark and bite" - so they are able to implement sanctions in real life as well. It's not like that everywhere. After the annexation of Crimea, the sanctions were weak, and we did not track how they were circumvented, as evidenced by the Russian invasion of Ukraine in February 2022, says Tom.

Tom Keatinge, Director of CFCS (Centre for Financial Crime and Security Studies), a research centre based in London, points to Turkey and the United Arab Emirates as being at the heart of these circuits. We can add Armenia, Kazakhstan or Georgia. According to the former banker, the system works in particular thanks to the more or less voluntary ignorance of Western companies: “They are in charge of applying the sanctions, but sometimes do not want to sacrifice their interests", deplores Tom Keatinge. When they suddenly see an increase in orders from a customer located in a suspicious country, they should ask themselves why. And who really is the purchasing entity. If they can't answer these questions, they shouldn't sell. He wants Western intelligence services "to ensure, by mapping the value chains, that there are no re-exports", modelled on the work of Israeli intelligence services to prevent Iran's nuclear proliferation...

Latvia went through a painful overhaul of the country’s financial system following the MONEYVAL assessment of 2018, but it worked out well as it meant that Latvia was better prepared when new sanctions on Russia were introduced."

For the first time, Europeans are putting in place sanctions targeting a country with which they are intimately linked, on commercial, financial or energy levels," says Tom Keatinge, of the British think tank Royal United Services Institute. Responsible for evaluating, country by country, the application of sanctions, he explains that “some fear that in wanting to strike the other, they strike themselves”.

Thanks to allies like Abu Dhabi, the Kremlin will not fall for a long time, says Tom Keatinge, head of the Centre for Financial Crime and Security Studies at RUSI.

Carolina Lewicka from Political Intelligence talks to Dr Kinga Redłowska from the Centre for Financial Crime and Security Studies of the Royal United Services Institute about how to design good and effective sanctions.

I'm afraid that most of the oligarchs will get their property back. But Russia caused hundreds of billions of dollars worth of damage to Ukraine, and it should pay for it," says the head of the Center for Financial Crime and Security Studies at the prestigious British think tank RUSI.

Political leaders have not yet clearly defined what the goal of these sanctions is, perhaps they don't even know exactly. They introduced the sanctions under pressure, because not imposing them would disappoint both the voters and the Ukrainian state and send a clear signal to the Kremlin about the weakness of the West. In 2014, after the annexation of Crimea, the West imposed too soft sanctions, so now we have the last chance to show our tough stance against aggressive Russia..."

...The sanctions bucket is still pretty leaky," says Keatinge. According to him, London will no longer be as welcoming a place for Russian oligarchs and their money as before, although British politicians also need to clean up their act and tighten the control of dirty or suspicious money. Keatinge leads a program mapping and combating dirty money at the UK's leading security and defense think tank RUSI. He was in Prague last week at seminars with Czech experts.

First of all, it should be said that it’s not an original idea because it was a point that was emphasised by the European Commission President Ursula von der Leyen in her State of the Union address in September. In any case, I think that for many years in Europe, when we thought about ‘dirty money’ we thought about criminal money coming from non-state actors, organised crime groups and and terrorists. But, of course, in recent months we’ve had very clear indications that money coming into the European Union is not only coming in for the purpose of crime but also to try and undermine our democracy, to sway elections, to buy influence....

Combating the financing of terrorist activity should be at the core of the security response, yet the policy community has seemingly moved on....

...If we believe - in theory - that sanctions packages weaken over time because the strongest sanctions are adopted at the beginning, then I would expect policymakers and legislators to spend a lot of time making sure that the first, second, third packages are properly implemented. Because plugging small holes in one place will be in vain if water pours through a giant hole in another. I think the EU has worked well so far. Now there are two things to do. Countries need to do what Lithuania and some other countries are doing - to dig deeper into the packages and ensure that they are implemented wherever possible. The second thing is that more must be done to harmonize sanctions...

Dirty money is undermining European democracy, and the effective implementation of sanctions against Russia is just part of an urgently needed response.