The Bank of Russia has started testing the centralized information service Know Your Customer. According to the developers, this will enable banks to reduce the cost of analyzing clients' activities in terms of meeting the requirements of the Federal Law No. 115-FL dated 07.08.2001 "On Countering the Legalization (Laundering) of Criminally Obtained Incomes and the Financing of Terrorism" and focus on high-risk transactions.
What is referred to here are the operations of organizations that do not conduct real economic activities, registered to front parties and controlled by third unfair parties.
According to the Central Bank estimates, the share of clients with a low level of risk is 99% of the total number of economic entities, and the share of clients with a high level of risk does not exceed 0,7%.
Information on the referring the clients to specific risk groups will be sent to banks on a daily basis through personal accounts on the official website of the Central Bank. Data on high risks will be accompanied by additional information on their typology. Banks, for their part, will determine how to use this information in their operating systems.
Further, the accounts of companies with a high level of risk will be blocked, and information thereof will be sent to the Federal Tax Service of the Russian Federation for removal from the Unified State Register of Legal Entities. In the future, such kind of measures may affect about 50 thousand economic entities.
In order to restraint the possibilities for the CEOs and shareholders of legal entities removed from the Unified State Register of Legal Entities to re-establish shell companies, a bill was introduced to the State Duma on November 16, according to which a three-year ban on the registration of such persons as shareholders may be introduced. Accordingly, it is also proposed to limit the entry of information about them into the Unified State Register of Legal Entities.
Globas contains information about companies and individuals in all countries in respect of which restrictions have been introduced. It is possible to automatically check the entry of a Russian company into the lists, identify beneficial owners, and assess risks.
The advantages of Globas tools for the sanctions risks prevention are as follows:
- separate search by a person;
- search on the list using diverse filters;
- promptly update of the sanctions list;
- detailed description of sanctions programs;
- check through the sanctions list is included in the subscription.
FACTS ABOUT SANCTIONS
Paradoxically, large financial losses from the sanctions are incurred by companies from countries that are not under the sanctions.
For 10 years from 2011 to 2021, OFAC (Office of Foreign Assets Control) fines for violation of the imposed sanctions and restrictions amounted to USD 4,7 billion.
The largest fines were imposed on BNP Paribas SA, France (USD 963 million), Standard Chartered Bank, Hong Kong (USD 657 million) and ING Bank N.V., Netherlands (USD 619 million).
The highest amount of fines of USD 1,289.03 million was recorded in 2019 (see Picture 1)
Sanctions lists in Globas are based on the official governmental sources:
- Russia –Government of the Russian Federation; Security Council, Federal Assembly.
The main law governing the application of sanctions or special economic measures is the Federal Law "On Special Economic Measures" (No. 281-FL dated December 30, 2006) - the main document governing the application of sanctions by Russia in order to ensure the security or hostile actions of other countries or personalities;
- European Union - European Commission;
- Great Britain - UK Government;
- USA - U.S. Department of the Treasury; Department of Commerce – Bureau of Industry and Security (BIS); Department of State – Bureau of International Security and Non-Proliferation; Department of State – Directorate of Defense Trade Controls; OFAC (Office of Foreign Assets Control);
- Ukraine - Ministry of Economy of Ukraine;
- other countries (Canada, Switzerland, Australia, etc.) – information from official departments, open sources and media.
Globas contains the unified list of companies, persons, air transport, ports and vessels under the sanctions or restrictive measures imposed by Russia, the USA, the European Union, Great Britain and other countries.
We will tell you more about the possibilities of the Information and Analytical system Globas, in particular about My Lists and Lists we recommend for sanctions check, at the webinar, which will take place on January 19, 2022.