Modern business is constantly exposed to global financial and political risks, which can have a serious impact on its operating activities. In a dynamic geopolitical environment, sanctions are becoming an integral part of international relations. The practice of their use continues to develop, countries are introducing counter-sanction measures, creating a complex network of restrictive measures. For businesses, this means the need of sanctions compliance and regular monitoring of counterparties.
To fully understand the situation, it is necessary to study many documents, the regulatory measures of different countries and organizations, and also understand the importance of sanctions checks and potential threats.
Information Agency Credinform answers Top 5 questions about the sanctions screening.
1. Who should check their counterparties for sanctions?
The question of who should be responsible for sanctions screening is relevant for all companies, especially for those engaged in the international trade, foreign economic activity and financial transactions. These are banks, financial institutions, exporting and importing companies, participants in global supply chains, as well as branches of foreign companies.
2. Why it is necessary to screen counterparties for sanctions?
Such check is not only a legal requirement, but also a necessity to reduce risks. Violation of sanctions can lead to serious consequences, including fines, loss of reputation, and sometimes criminal liability.
The need to comply with sanctions measures of the UN Security Council and special economic measures (SEM) of Russia is enshrined at the legislative level in the Russian Federation. The Federal Law No. 422-FZ dated August 4, 2023 created a set of tools for sanctions regulation, established liability measures for legal entities, introduced the concept of a “blocked person,” etc.
3. Where to find a unified database of sanctions lists from all over the world?
Unfortunately, there is no single database containing information about sanctions lists from all over the world. Sanctions data is distributed across various sources. Within the same country, restrictions may be set by different authorities, and information about them may be presented in different formats. Information and Analytical system Globas is a resource that brings together various sources of information on global sanctions and tracks list updates in real time. Sanctions Compliance, a module of Globas, provides opportunities for comprehensive check of counterparties for sanctions and risk assessment, including reconciliation with the consolidated register of restrictive measures adopted by various countries and organizations.
4. What are the consequences of refusing to check counterparties for sanctions?
Failure to undergo a sanctions check can lead to serious consequences for the company. Firstly, this threatens financial losses in the form of fines, secondary sanctions and other restrictions. Secondly, this can negatively affect the company’s reputation and lead to loss of trust from clients and partners. Moreover, violation of sanctions may cause a risk of criminal liability for company management.
5. How to facilitate the process of checking counterparties for sanctions risks?
Automation of sanctions check of counterparties can significantly simplify and speed up this process. The use of specialized software solutions, such as Sanctions Compliance in Globas, makes it possible to automate the monitoring of sanctions lists, receive notifications of new sanctions and adapt risk strategies to the specific needs of the company.
Sanctions Compliance in Globas contains detailed information on sanctions and restrictions, including the 50 Percent Rule, as well as additional sources and more in-depth analysis of companies, persons and objects that are subject to restrictions.
Compliance with sanctions is not only a legal requirement, but also a strategic necessity for business in today's globalized world. Proper verification of counterparties for sanctions helps reduce risks and ensure the stability of the company’s operations. With specialized instruments such as Sanctions Compliance in Globas, this process becomes more efficient and transparent.
Globas
Sanctions Compliance
Sanctions Compliance provides an opportunity to check Russian and foreign companies, persons, water and air transport. Persons associated with companies are also checked: beneficiaries, owners, managers, affiliates and subsidiaries. The module contains extensive information about the imposed sanctions and restrictions, including the 50 Percent Rule, additional sources and deeper analytics on companies, persons and objects that have fallen under restrictions and in various risk registries.
