The recent surge in U.S. sanctions and export controls on Russia is causing resource strains for compliance teams, KPMG lawyers said during a webinar last week. Constantly expanding restricted party lists, as well as due diligence requirements under the Commerce Department’s military end-user rules, have become increasingly time-consuming and expensive to comply with, the lawyers said.
Citigroup will officially wind down its consumer banking and local commercial banking activities in Russia this quarter, the bank said Aug. 25. Citi said the wind-down, spurred by U.S. and multilateral sanctions against Russia for its invasion of Ukraine, will affect 15 branches and a range of deposits, investments, loans and cards. “The wind-down will be carried out in compliance with applicable regulations and Citi will honor its obligations to clients, employees and partners,” the bank said. “As previously noted, Citi continues to support its multinational institutional clients, particularly those which are undergoing the complex task of winding down their operations in Russia.”
The U.K. removed one entry from its Russia sanctions list, it said in an Aug. 23 notice. The Office of Financial Sanctions Implementation dropped Mikhail Vladimirovich Razvozhayev, the governor of Sevastopol, from the list. Also, OFSI amended 41 entries under the Russia restrictions and corrected another entry. The listing for Vladimir Olegovich Potanin, the owner of Rosbank and one of Russia's richest people, was corrected to add his middle name.
The Treasury Department warned Turkish businesses this week that they may be hit with U.S. sanctions if they do business with designated Russian people or entities, The Wall Street Journal reported Aug. 22. In letters to the American Chamber of Commerce in Turkey and the Turkey Industry and Business Association, Treasury Deputy Secretary Wally Adeyemo warned Turkish companies that they will be cut off from American banks if they do business with sanctioned Russian banks.
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The U.K. published a General License Aug. 22 under its Russia sanctions regime permitting crown servants and contractors, and their family members or visiting family members, to "carry out activities in their personal capacity in Russia which would otherwise be prohibited," under the Russian restrictions. Where visiting family members -- the spouse, civil partner, parent, sibling or child of a crown servant or contractor -- are concerned, the license extends only to activities that stem from their being in Russia to visit the household of a crown servant or contractor. The license took effect Aug. 19.
The Office of Foreign Assets Control on Aug. 19 issued one new Russia-related general license, updated an existing Russia-related general license and deleted a range of entries from its Specially Designated Nationals List.
The Netherlands extradited an alleged Russia money launderer and cybercriminal to the U.S. to face charges, DOJ said this week. Denis Mihaqlovic Dubnikov has worked with others to launder the proceeds of ransomware attacks on people and entities in the U.S. and abroad, the agency said. Dubnikov laundered more than $400,000 in ransomware proceeds in July 2019, DOJ said, and faces a maximum 20-year prison sentence. The Treasury Department has issued guidance on the sanctions risks of facilitating ransomware payments (see 2010010018). The FBI has urged the agency to clarify the guidance (see 2207210058), and experts have said better reporting requirements will lead to more efficient sanctions (see 2206070027).
The mass exodus of western companies from Russia caused by sanctions are “catastrophically crippling the Russian economy” and have “irrevocably” damaged the country’s position as a global commodity exporter, the Yale Chief Executive Leadership Institute said in a recent report. The report also said Russia’s imports have “largely collapsed” as the country faces challenges procuring “crucial inputs, parts, and technology from hesitant trade partners,” which has led to broad domestic supply shortages. The country’s production also has “come to a complete standstill with no capacity to replace lost businesses, products and talent,” the report said. “Looking ahead, there is no path out of economic oblivion for Russia as long as the allied countries remain unified in maintaining and increasing sanctions pressure against Russia.”
Canada has frozen more than $120 million worth of assets and blocked more than $290 million worth of transactions related to Russia since Moscow’s invasion of Ukraine in February, the country said this week. Canada said the assets were either owned or controlled by a person designated under its Russia sanctions. The country said it “continues to receive new information” about new assets or transactions that could be subject to sanctions.