Word out of Russia is that Vladimir Putin’s younger daughter, Katerina Tikhonova, has been tapped to co-chair a committee to coordinate import-substitution efforts by the Russian Union of Industrialists and Entrepreneurs. This move shows how, as the conflict in Ukraine drags into its 7th month, Russia is feeling the impact of sanctions and are increasing efforts to find ways around them.
Businesses must be regularly screening new and existing partners to ensure they are not inadvertently transacting with an entity that is evading sanctions or helping others to evade them. With Russia and their partners ramping up their efforts to evade restrictions placed on them by Western governments, these efforts have become increasingly important.
Agencies Identify Potential Sanction Evasion Partners
While no nations have been officially accused of actively facilitating sanction evasion, U.S. enforcement agencies recently released a list of 18 countries they have identified as having a strong possibility as acting as transshipment points. Among them, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan have been identified as “common transshipment points”.
Additionally, the UK’s Office of Financial Sanctions Implementation (OFSI) and National Crime Agency (NCA) have issued a Red Alert urging increased diligence in identifying potential sanction-dodging efforts, warning that “Russian money launderers have increasingly been observed in U.K.”
Alerts such as this one stress the importance of undertaking appropriate due diligence efforts, including having a strong denied party screening program to identify potential risks.
The Importance of Denied Party Screening
These developments highlight the ever-changing nature of denied party screening lists and regulations. Russia and its allies have diverse business interests ranging from automotive to paper; every industry should consider itself at risk of transacting with a potential sanction evader.
Companies doing business with the countries identified by sanction enforcement agencies should be examining their risk exposure to make sure that they are operating on the right side of the law—including looking into the possibility that a participant in a transaction could be considered a sanctioned entity under the OFAC 50 percent rule and other similar regulations.
To remain compliant, organizations should always try to ensure they are screening against the most up-to-date lists available, as an entity not on a list one day can well be on it just a day later. To avoid accidental interactions with sanction evaders, businesses need reliable denied party screening software that identifies sanctioned entities and evaders.
Stay on Top of Identifying Sanction Evaders with Descartes
There’s no denying that it can be a challenge to effectively stay up-to-date with changes to denied and restricted party watch lists, the latest sanctions, and newly identified sanction evaders.
As a provider of an industry-leading suite of denied party screening, 3rd party risk management solutions, as well as trade content for leading business systems, that can be integrated with minimal disruption, sometimes in under an hour, Descartes is here to help.
Descartes compliance solutions are flexible and modular, allowing organizations to pick the functionality and content they need now and to scale up as needs grow and change.