SANCTIONS COMPLIANCE CHALLENGES
A pressing challenge for multinational companies is keeping up with sanctions regulations across various jurisdictions in which they do business. The global sanctions landscape is constantly changing as geopolitical events see names added to, and withdrawn from, sanctions lists in different jurisdictions. Companies must be mindful of hundreds of lists globally that are frequently updated. During the Trump administration, for example, the US government made a record 3900 sanctions designations, including the reintroduction of sanctions against Iran after its withdrawal from the Joint Comprehensive Plan of Action (JCPOA). And following the international political response to Russia’s invasion of Ukraine, the pressure on companies has intensified.
As sanctions regulations become more complex, far-reaching and adaptive, organisations need to be proactive – ready to quickly respond to new challenges and legal requirements. They must remain cognisant of new and anticipated sanctions, as well as compliance requirements and best practices.
Russia sanctions and enforcement
While the global sanctions landscape is in a state of flux, the most visible and notable developments in recent times have related to Russia’s invasion of Ukraine. The US, UK and European Union (EU) have led the way in terms of sanctions against Russian individuals and entities, including financial institutions (FIs).
To date, many of the sanctions directed at Russia have targeted high-profile and high-net-worth individuals, chief executives of Russian state-owned businesses, main shareholders of other well-known businesses, and of course political figures including Russian president Vladimir Putin. They have also targeted Russian banks and other Russian businesses, including those operating in the aircraft, defence, shipbuilding, road transportation and machine manufacturing sectors. Companies owned or controlled by a designated person have also effectively been sanctioned. Territorial embargoes and prohibitions on transactions, exporting and providing related services have been imposed.
Jul-Sep 2022 Issue
Richard Summerfield