The Latvian State Security Department (VDD) on Wednesday released guidelines for how to target terrorism financing in the country and revealed previous case studies where Russia and banned organisations have attempted to use legal loopholes in the Baltics.
Although the VDD report focuses on terrorism financing, it names Russia as a country that cooperates with regimes under sanctions, such as Iran and North Korea, “which causes additional risk to get indirectly involved in the implementation of circumvention of sanctions”.
According to the report, “products allegedly intended for [Russian] economy are frequently used for military purposes” and therefore Latvia should pay particular attention to goods transiting the country.
The guidelines give practical information for cross-institutional and international cooperation on how to identify and tackle illicit sources of financing by focusing on tracking financial transactions in the country, among other measures.
The report also profiles Russian and Syrian attempts to transfer mechanical and physical goods to Syria via Latvian ports, including materials usable in nuclear industry, by engaging with third companies and obscuring the final destination of the shipments.
In another instance, a fintech company in Lithuania provided services for a website linked to the so-called Islamic State.
“On February 12, 2019, Financial Crime Investigation Service of Lithuania (FNTT) started an investigation into the Lithuania-based company Virtualios Valiutos and its relation to a wider terrorism financing network.”
According to the report, “donations were collected for the support of terrorists by using cryptocurrency Bitcoin,” before the company noticed the source and beneficiary of the funds and shut down the operation.
“This particular case confirms that terrorist supporters may also use foreign-based service providers to finance their activities,” according to the report.
The Latvian VDD claims that even though no terrorism incidents have taken place in the country and no terrorist organisations have roots in Latvia, “the VDD has come across persons in Latvia who express views that indicate radicalisation risks”.
“The VDD has also identified Latvian residents who have joined [ISIS].”
In 2015, the Latvian public broadcaster reported that a pair of Latvian muslims may have travelled to Syria to join the so-called Islamic State.