Updated Information on Business Compliance Regarding Current Russian Sanctions [25.04.2022]

Updated Information on Business Compliance Regarding Current Russian Sanctions [25.04.2022]

Headline: Comprehensive Sanctions Against Russia and Belarus: An Overview

The international community, particularly the European Union and other Western countries, has imposed a series of sanctions on Russia and Belarus in response to their invasion of Ukraine. Here's an overview of these sanctions and their implications:

Sanctions on Russia

The European Union (EU) has announced an 18th sanctions package against Russia, which includes:

1. Energy Sector: New measures target Russian oil and petroleum products, including transaction bans and expanded restrictions on energy-related activities.
2. Financial Sector: The package replaces the SWIFT ban with a transaction ban on certain Russian banks and adds 55 parties to the asset freeze list.
3. Defense Sector: Expands export restrictions, further weakening Russia's military capabilities.
4. SWIFT and Banking: Some Russian banks are banned from SWIFT, impacting global financial transactions.

Additionally, the US has imposed sanctions on entities supporting the Russian military, aerospace, maritime, and high-technology sectors, and prohibited the provision of specialized financial messaging services to certain Russian banks.

Sanctions on Belarus

The EU has aligned its sanctions against Belarus with those against Russia, including trade restrictions and asset freezes. Additional measures target sensitive goods and technologies that could enhance Belarusian industrial capacities.

Implications for Businesses and Customers

1. Compliance Challenges: Businesses must ensure compliance with evolving sanctions, which can lead to legal and reputational risks. The expansion of "best efforts" obligations requires EU persons to ensure non-EU companies do not undermine EU sanctions.
2. Supply Chain Disruptions: Sanctions on energy and other critical sectors disrupt global supply chains, impacting businesses and consumers.
3. Economic Impact: The economic contraction in Russia and Belarus, coupled with global sanctions, can lead to higher costs and reduced availability of certain goods.

Notable Sanctions and Measures

• On April 6th, President Biden issued an executive order broadly prohibiting all "new investments" in Russia by US persons.
• On March 15th, the UK announced new sanctions against 370 more Russian and Belarusian individuals and entities.
• Switzerland joined the 5th package of the EU sanctions against Russia and Belarus in early April.
• The most severe EU sanctions target 52 Russian individuals and entities and include asset freezes, a prohibition on making funds available, and a travel ban on entering or transiting through EU territory.
• Sanctions lists include the names of individuals and entities targeted by various authorities on a national or international level.
• The EU announced an extended prohibition on deposits to crypto-wallets, and on the sale of banknotes and transferable securities denominated in any official currencies of the EU member states to Russia and Belarus, or any natural or legal person, entity, or body in Russia and Belarus.
• On February 26th, the US and its allies moved to block certain Russian banks from access to the SWIFT international payment system.
• On February 27th, the European Commission Head Ursula von der Leyen announced "shutting down the EU airspace for Russian-owned, Russian registered or Russian-controlled aircraft".

These sanctions significantly impact businesses and customers worldwide by complicating international trade, increasing compliance costs, and affecting global economic stability. To help navigate these challenges, companies like Sumsub offer AML Screening and ongoing AML monitoring services to ensure compliance and reduce false positives.

In addition, Europol, Eurojust, Frontex, and EU member states have launched Operation Oscar to support financial investigations targeting assets owned by individuals and legal entities under Russia-related sanctions and criminal investigations concerning the circumvention of EU-imposed trade and economic sanctions.

The UK has also announced new aviation sanctions, aimed at detaining Russian aircraft and removing aircraft belonging to sanctioned individuals and entities from the UK register, banning the export of aviation and space-related goods and technology, and forbidding UK companies to provide insurance and reinsurance services in relation to these goods and technology.

As the situation continues to evolve, it is crucial for businesses and individuals to stay informed and compliant with these sanctions to avoid legal and reputational risks.

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