What are sanctions? How are sanctions imposed in the current situation in Europe? How should companies handle sanctions in terms of compliance?
We spoke to sanctions specialists Louie Vargas and Tyler Nielsen to find out more. Below is a summary of the podcast interview.
What are sanctions?
Sanctions are means and activities with the goal of compelling actors to change their behavior. They can be imposed on a personal, organizational or national level and can include both political and financial activities.
Financial sanctions are means of cutting off targeted actors from engaging in the financial space in specific countries or regional areas. Common examples include freezing of assets or restricting transactions and trades. In turn, these means puts pressure on a persons, organizations or countrys economy and reputation.
Examples of political sanctions are exclusion from certain unions or international contexts, or ending diplomatic ties with a specific country.
The current situation in Europe
As the Ukraine has been invaded by Russia, multiple sanctions from the EU, U.S. and UK have been imposed on Russia, politically and financially.
Sanctions imposed so far include exclusion from sporting events (FIFA World Cup e.g.), freezing of assets for oligarchs and officials, cutting off supplies of certain goods or closing off airspace for Russian flights to name a few. The EU has also excluded 7 Russian banks from SWIFT, the world's leading provider of secure financial messaging services. SWIFT facilitates trillions of dollars of cross-border payments between 11,000 financial institutions in more than 200 countries.
There are almost new sanctions being handed out daily in this instance, an attempt from the transatlantic union of the EU, U.S., and the U.K. to compel Vladimir Putin to end the war. Make sure to follow the appropriate channels and sources for the latest update on sanctions imposed.
Handling sanctions in terms of compliance
Risk assessment framework
Tailor your risk assessment framework and measures to your own business and "risk appetite". There are no "one size fits all" in risk.
Screenings & Data
Checking your customer database and their relations or company engagements for appearances in sanctions lists regularly is highly recommended. Use technology and data to support your decisions!
Be proactive, anticipate that changes will occur and make sure you do the work to avoid risks. It's always better to do the work thoroughly, instead of paying the consequences of process deficiency.
Through webhook solutions you can monitor changes in sanctions lists today, receiving notifications when changes occur in your customer database. Roaring offers one of the most comprehensive ways of doing this, as we supply a webhook for a consolidated list with EU, UN and OFAC sanctions data.