What you need to know about sanctions on Russia

4 Mins

The UK government and other governments around the world have imposed additional and far-reaching sanctions against Russia in an effort to persuade the country to withdraw its aggressions towards Ukraine.

Financial and trade sanctions have been around for some time and is not a new burden for companies in the UK. However, the new situation in Ukraine means that more European companies are potentially exposed to sanctions due to their proximity and commercial connections to Ukraine and Russia.

Previously permissible activities and business relationships may now have changed. As a result of Russia's invasion of Ukraine, laws have been revised at a rapid pace, resulting in an unprecedented number of people and entities added to the sanctions lists, and the Economic Crime Bill March 15, 2022, being fast-tracked.

Chapter 1

What are sanctions lists?

Governments have used sanctions lists to put economic pressure on opposing regimes by preventing businesses from operating or working with people /organsiations involved within a particular country or within a specific sector/group.  

Types of sanction lists can include but are not limited to the following:

  1. HM Treasury Sanctions

  2. EU Consolidated Sanctions

  3. United Nation Sanctions

  4. OFAC Sanctions

Chapter 1

How new financial sanctions are impacting UK companies?

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Understanding new financial sanctions is crucial for businesses trading in the UK, since a breach could lead to serious regulatory penalities, including criminal prosecution.

The sanctions apply within the UK and in relation to the conduct all UK individuals and businesses wherever they are in the world. This means a company cannot receive payments from, or make funds available to, those affected by financial sanctions. 

However broader sanctions may mean that firms cannot engage in activities that circumvent restrictions, enable or facilitate the circumvention of any sanctions – knowingly or unknowingly.

Any breaches of the UK sanction’s regime for example, could lead to maximum prison sentences of 7 years and substantial fines. As such, it's integral that businesses only enter into commercial relationships, once they have conducted an appropriate level of due diligence and screening on their customers and suppliers.

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Chapter 1

What should companies do right now in relation to Russian sanctions?

Companies and financial institutions with a link to Russia, be that credit lines, supply chains or financial instruments, need to fully understand their exposure and identify proactive steps that can be taken should additional sanctions be implemented. 

Actions that can be taken include:

  1. Risk assessing your firm, relevant clients, and suppliers.

  2. Ensuring policies, procedures, and controls to prevent your firm breaching sanctions including how technology could help reduce risk.

  3. Training your staff in relation to sanctions checking including screening, restrictions, and reporting obligations.

  4. Identifying, verifying, and screening your clients and beneficial owners against sanctions lists with ongoing monitoring.

Chapter 1

How Creditsafe is helping companies stay compliant with the imposed Russian sanction regulations

With your business' compliance and efficiency at the heart of what we do, Creditsafe's PEPs and enhanced sanction checks deliver an answer in seconds.

Through automating the ongoing monitoring of individuals and entities, you will be able to keep a close eye on your customers daily and be alerted immediately of any changes against up-to-date sanctions lists, including if they are added to, or removed from, a sanctions list. 

Our data sources are refreshed on an ongoing basis which enables companies to stay up-to-date and continue to make informed decisions around sanctions and AML risk. 

Ready to streamline your PEPs & Sanctions screening process?

Experience the speed of Creditsafe's online compliance checks today.