The impact of fresh sanctions as Russia invades Ukraine

The far-reaching sanctions against Russia are a reminder that sanctions compliance is a critical issue for accountants and others in the regulated sector. 

After its aggression against Ukraine, the US, UK and EU launched new rounds of economic sanctions against Russia. These sanctions add to the ones already in place, following the invasion of Crimea in 2014. New economic sanctions are likely to impact the work of accountants as well as many other regulated businesses.

In broad terms, UK persons – incorporated entities, nationals and those in the UK – are prohibited from making funds or economic resources available to Russian persons and entities located anywhere across the world. Nor can they accept such funds or resources from them. These prohibitions also extend to dealings with businesses, that are directly or indirectly owned or controlled by these persons.

UK prime minister Boris Johnson described the new sanctions as “the first tranche” and said that further sanctions could be deployed in due course.

Sanctions necessitate fresh due diligence and screening by accountants

In practical terms, members (if you have not already done so) should be immediately and thoroughly assessing any exposure they have to Russia or Russian persons and entities. Understanding potential exposure points will help members facilitate a rapid response to these new sanctions. Members must consider all partners or customers and their ownership structures, to identify any direct or indirect investment from Russian entities or individuals.

If such funds are held, members must freeze such funds or resources and any others that are owned or controlled by persons listed in the Financial Sanctions Notice and must refrain from dealing with these assets or making them available (directly or indirectly) to persons listed unless licensed by OFSI to do so.

The full list of those subject to financial sanctions by the UK can be found at:

• Financial sanctions targets: list of all asset freeze targets
• Russia: list of persons named in relation to financial and investment restrictions
• Financial Sanctions Notices are issued under the Russia (Sanctions EU Exit) Regulations 2019.

Members are also encouraged to review the CCAB guidance, on Politically exposed persons, (PEP) Financial sanctions and other prohibited relationships.

Members must report any findings to OFSI and any information that would facilitate compliance with the sanctions and provide any information that OFSI may request. Failure to comply with the regulations or provisions is a potential criminal offence. 

Given this is an evolving and complex situation our members are strongly recommended to obtain expert legal advice if required.

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