ANTI-CORRUPTION COMPLIANCE AND THE RUSSIA/UKRAINE SANCTIONS

Companies operating in Russia today are to be congratulated. Many have spent the last five to 10 years developing and implementing anti-corruption policies and procedures across one of the largest markets in the developed world. This is no mean feat in arguably the world’s most corrupt developed country.

These efforts are not solely the product of foreign policies and procedures imposed by Western corporate headquarters. Today’s anti-corruption movement in Russia has taken on a life of its own. Case in point: the American Conference Institute’s annual anti-corruption conference in Moscow featured this year for the first time panellists predominantly from Russia and neighbouring countries and panels conducted in Russian (for a clearly majority-Russian-speaking audience).

Two steps back

While robust compliance policies and procedures are now the norm and not the exception at Russian outposts of Western companies – and, increasingly, at home-grown Russian companies – events in Ukraine have created a new range of compliance challenges for Western companies. On 17 March 2014, the US Treasury Department’s Office of Foreign Assets Control (OFAC) imposed the first of a growing series of sanctions (the ‘Ukraine Sanctions’) on Russian and Ukrainian individuals and entities perceived by OFAC to be behind the unrest in Ukraine (or to be close to such persons, namely Vladimir Putin).

Oct-Dec 2014 Issue

Baker & McKenzie LLP