Latvia-Russia Trade Decline & Support for Ukraine | Foreign Ministry Update

Latvia’s Shifting Trade Landscape: Navigating Sanctions and Supporting Ukraine

Latvia’s economic relationship with Russia is undergoing a significant transformation, driven by geopolitical events and a concerted effort to enforce international sanctions. Recent data indicates a substantial decline in trade between Latvia and Russia, with imports decreasing by 73.5% in the first 11 months of 2025 compared to the same period in 2024. Trade in goods and services has fallen by 78.1% since 2022.

The Impact of Sanctions and Export Controls

The Latvian government, aligning with EU policy, is actively encouraging businesses to cease trade with both Russia and Belarus. This push extends beyond direct trade to include increased scrutiny of export partners in third countries, aiming to prevent the flow of goods that could be used by the Russian military. This aligns with a broader strategy to limit Russia’s access to critical technologies and resources.

Foreign Minister Baže has emphasized the importance of maintaining pressure on Russia through sanctions, particularly targeting its “shadow fleet” – vessels used to circumvent restrictions. The focus is on preventing any form of commerce that supports the aggressor nation.

Supporting Ukraine’s Integration into the European Market

Latvia is actively involved in initiatives to support Ukrainian businesses and facilitate their integration into the European single market. The LATUA 2 project, led by the Latvian Chamber of Commerce and Industry (LTRK) in collaboration with the Ukrainian Chamber of Commerce and Industry, aims to provide Ukrainian SMEs and business support organizations with the knowledge and connections needed to succeed in the EU. This 18-month project, funded with a budget of 74,237.50 EUR, focuses on knowledge transfer and networking opportunities.

This support extends to practical assistance, including helping to address damage to Ukraine’s critical energy infrastructure. Latvian businesses have been actively involved in providing aid and expertise to assist in the rebuilding efforts.

LTRK Under Scrutiny: Addressing Potential Sanctions Violations

Recent investigations by the State Security Service (VDD) have focused on potential violations of EU sanctions related to the export of Russian and Belarusian plywood to Ukraine. Searches were conducted at the Valmiera branch of the LTRK and the homes of two officials, highlighting the seriousness with which Latvia is taking the enforcement of sanctions.

Declining Business Ties: A Statistical Overview

The number of Latvian-registered companies exporting goods to Russia has decreased by 79.7% since 2021. This dramatic reduction underscores the impact of sanctions and the changing geopolitical landscape on Latvian businesses. The trend suggests a long-term shift away from reliance on the Russian market.

What Does This Mean for Latvian Businesses?

Latvian companies are increasingly diversifying their export markets and focusing on opportunities within the EU and other international partners. The government is actively supporting this transition by providing resources and assistance to businesses seeking to expand their reach.

Pro Tip: Explore opportunities within the EU single market. The EU offers a vast and stable trading environment with reduced barriers to entry.

FAQ

Q: What is the LATUA 2 project?
A: It’s a project led by the LTRK to help Ukrainian businesses integrate into the European market.

Q: Is Latvia completely cutting off trade with Russia?
A: Trade has significantly decreased, and the government is actively encouraging businesses to cease all trade with Russia and Belarus.

Q: What is the LTRK’s role in the sanctions enforcement?
A: The LTRK’s Valmiera branch was subject to investigation regarding potential violations of EU sanctions related to plywood exports.

Did you know? The Latvian government is prioritizing support for Ukrainian businesses as a key component of its foreign policy.

Learn more about Latvia’s foreign policy priorities here.

Interested in learning more about the impact of the war in Ukraine? Visit Latvian Radio and Television’s coverage.

We want to hear from you! How are these changes impacting your business? Share your thoughts in the comments below.