US drops sanctions against Latvian port authority

Aivars Lembergs resigned as chairman of Vetspils Freeport Authority on Dec. 10, the day after the U.S. sanctioned the port authority for its connection to the Latvian oligarch.

The U.S. relieved Latvia's Vetspils Freeport Authority of sanctions after its chairman, Aivars Lembergs, resigned. [Photo Credit: Vetspils Freeport Authority]

The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) on Dec. 18 announced that it has removed Latvia’s Ventspils Freeport Authority from its sanctions list.

OFAC added the port authority to the Specially Designated Nationals and Blocked Persons (SDN) List on Dec. 9 for its connection to corrupt Latvian oligarch Aivars Lembergs.

The agency added Lembergs to the SDN List, as well as several business entities in his direct or indirect control, under the Global Magnitsky Human Rights Accountability Act. Lembergs has been accused of using his office as mayor of Ventspils to initiate bribes and launder money.

The Latvian government immediately passed legislation effectively ending Lembergs’ control of the Ventspils Freeport Authority. According to the legislation, the port will now be supervised by four representatives appointed by the Latvian government.

OFAC said Lembergs resigned from the Ventspils Freeport Authority on Dec. 10. He had previously served as the board chairman.

“The U.S. applauds the Latvian government’s swift response to Lembergs’ designation. This delisting of the Ventspils Freeport Authority underscores our commitment to work closely with our partners to combat corruption,” said Treasury’s Deputy Secretary Justin G. Muzinich in a statement.

Ventspils offers ice-free, year-round service in the Baltic and handles about 30 million tons of bulk cargoes annually.

Under the SDN List, all property and interests in property of Lembergs and of any entities that are owned, directly or indirectly, 50% or more by him that are in the U.S. or in the possession or control of U.S. persons are blocked. 

OFAC’s regulations generally prohibit all dealings by U.S. persons with individuals and entities on the SDN List.

Currently, Lembergs and his other businesses, including the Ventspils Attistibas Agentura (Ventspils Development Agency), Biznesa Attistibas Asociacija (Business Development Association) and Latvijas Tranzita Biznesa Asociacija (Latvian Transit Business Association), remain on the SDN List.

On Dec. 18, OFAC extended a general license, valid through midnight on Jan. 8, for U.S. persons or entities to “wind down” any business dealings with Lembergs and the remaining listed entities.

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Chris Gillis

Located in the Washington, D.C. area, Chris Gillis primarily reports on regulatory and legislative topics that impact cross-border trade. He joined American Shipper in 1994, shortly after graduating from Mount St. Mary’s College in Emmitsburg, Md., with a degree in international business and economics.