Whenever there is a geopolitical conflict, large or small, there are usually sanctions involved. Sanctions are a ‘tool’ to protect a national interest by targeting certain individuals, companies, and/or countries. An economic sanction imposes a set of restrictions that includes trade embargos or import/export restrictions on certain goods (i.e., technologies, grain, aviation) while financial sanctions target the ‘cash’, investments, and/or property of certain individuals, companies, and/or countries. Sanctions may be issued by the United States President or Congress, the European Union, or the United Nations Security Council.
Financial sanctions imposed by the United States are managed and enforced by the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) through the Specially Designated Nationals (SDN) List. This list targets both individuals and companies. Any individual or company listed as an SDN is subject to a complete and immediate asset freeze, meaning that any property (including bank accounts) or interest in property must be blocked. Financial institutions are required to periodically search, identify, and immediately block any property or interest in property of sanctioned persons and companies and to report such information to OFAC within 10 days. Failure to identify and block a SDN could result in significant monetary fines and other regulatory actions.
The current conflict between Russia and Ukraine has released a flurry of sanction activity. Russia’s large banks are deeply integrated into the global financial system. Current sanctions have effectively severed these banks from Western markets (individuals, companies, and banks). Therefore, financial institutions should not only stay current on this information for internal use but also to serve as an information resource for their clients. Some helpful links are provided below.
The OFAC Sanctions List Search site: https://sanctionssearch.ofac.treas.gov/
This site allows you to see when the last OFAC updated occurred, what has changed from the previous list, provides guidance, and has a link to sign-up for OFAC email notifications.: https://home.treasury.gov/policy-issues/financial-sanctions/specially- designated-nationals-and-blocked-persons-list-sdn-human-readable-lists
The OFAC Recent Actions not only provides the most up-to-date information but also provides links to previous actions.: https://home.treasury.gov/policy-issues/financial- sanctions/recent-actions
Reuters provides tracking of sanctions since the beginning of the Russia/Ukraine conflict from a global perspective. The United States is not the only entity issuing frequent sanctions since February 24, 2022.: https://graphics.reuters.com/UKRAINE-CRISIS/ SANCTIONS/byvrjenzmve/