Actions to be taken in light of new sanctions

Dear Reader,

In response to the Russian invasion of Ukraine, the United States, the United Kingdom, the European Union, Canada and Japan has announced increased sanctions towards Russia and to some extent Belarus. Sanctions are an essential tool used by states to prevent conflict or respond to emerging or current crises. At the time of this newsflash the full extent of the sanctions is not known and affected clients need to follow the development closely.

The sanctions are intended to exclude the Russian financial services sector from international finance and commerce. Several Russian banks, financial institutions, corporations and individuals have been added to sanctions lists. In addition, the United States are imposing Russia-wide export restrictions on a number of goods and services. It is essential to understand that this includes certain items and goods produced in foreign countries using U.S.-origin software, technology, or equipment. Besides military or dual use items or goods, this includes semiconductors, telecommunication, encryption security, lasers, sensors, navigation, avionics and maritime technologies.

We strongly advise our clients to ensure that they conduct updated KYC checks to ensure that counterparties and beneficial owners of counterparties are not part of the extended sanctions lists. Further, clients that trade with or operate business in Russia or Belarus should check if their goods or services are covered by new export restrictions or sanctions and take appropriate actions if they are.

In addition, facilities agreements and other agreements often contain extensive sanction clauses. Therefore, we advise our clients to review their existing agreements to ensure that they are in compliance with any sanction clauses in such agreements.

Please feel free to share this newsflash with colleagues and friends and do not hesitate to contact us if you have any questions about how the sanctions may affect your business.

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