As the crisis in Crimea escalates, it is becoming increasingly likely that the UK (and the EU) will impose draconian economic and trade sanctions against Russia. This will potentially have a direct impact for UK businesses, particularly firms in the City of London who may be dealing with Russian businesses and individuals who could become the subject of sanctions. The UK media has also reported on Russian financial institutions repatriating assets held in London back to Moscow.
If you are involved in any business activities or deal with clients that have connections with Russia, it is crucial that you act now to ensure that you have adequate systems and controls in place to identify and monitor against potential breaches of sanctions across your business operations. We are already seeing clients who may be directly affected by such issues.
The Financial Sanctions Regime in the UK is a minefield of different statutory instruments and EU regulations implementing sanctions imposed both by the United Nations Security Council and by the EU. In broad terms, the UK Financial Sanctions Regime seeks to prevent targeted individuals or entities from dealing with their funds and accessing financial services. Breaches of the regime can be wide reaching and involve substantial financial penalties as well as imprisonment. At the same time, companies need to be aware of the complex Trade Sanctions Regime that could impede your business operations. Those in breach of either the UK Financial or Trade Sanctions Regimes may also find themselves in breach of UK Anti-Money Laundering legislation, which focusses on the flow of monies from any form of “criminal” conduct, including sanctions breaches. It’s not just UK legislation you need to be aware of. Elements of the US sanctions and export control regimes have extra territorial effect and apply to all companies which conduct business in America.
With our specialist sector knowledge and experience, our Regulatory & Compliance practice group can assist you and your business with any all aspects of compliance with the UK Financial and Trade Sanctions Regimes, from risk assessments to identify weaknesses in your business operations through to supporting you through investigations and enforcement proceedings before all of the major regulatory agencies.
If you have any questions about financial sanctions and how your business should prepare to address these risks then please contact your usual Fox Williams contact.