Mr. Karnoukhov

– Sanctions, embargoes, tariff wars between countries – all this affects the business engaged in export trade or importing foreign components, the financial institutions, because of the increased risks of transactions. ! is is a new reality with which we must learn to work. 

Any law which regulates the further sanctions innovations is crucial to business as it influences the established sales channels or a supply chain. 

Sanctions compliance serves to prevent these risks. Its vital role in protection of the value of shareholders’, the business owners’ assets is obvious. 

Today, the services provided by professional experts and consultants in the field of sanctions audit and compliance have become in demand. Rod Tuvaev, head of sanctions law practice at Alliance Legal Consulting Group, is one of such professionals.

 – Mr. Tuvaev, is the development of business related to the countries of Europe and the USA possible under the sanctions regime? What exactly is the task of the sanctions managers? 

Mr. Tuvaev 

– Answer yourself the questions: how often do you open the 26 US sanctions lists? Do you have a consultant on sanctions? Do you conduct a sanctions audit of the business activities of your company, or do you conduct a sanctions due diligence of a project before investing or participating in it? 

Do you assess the risks of non-compliance due to sanctions against the contact obligations of your company, contractors, suppliers, foreign contractors of your suppliers? 

Do you study the sanctions background or the relationship with the sanctioned persons as part of the verification procedure of the counterparty (know your client)? ! e OFAC enforcement practice shows that today you should answer “Yes!” to these questions, especially if you export to the US or EU, receive components from the US or Europe, or simply participate in international projects. 

Nevertheless, there is an opportunity for business to develop under the sanctions regime, if certain conditions are met. ! e task of experts, auditors and sanctions managers is to protect a business by creating a system in which all the transactions related to international trade will be 100% legal in the jurisdictions of all the countries where the activity is conducted! 

– What types of sanctions regarding domestic business exist today? 

Mr. Tuvaev – In relation to Russia, blocking sanctions were introduced under the Ukraine program and are directed mainly against defense industry enterprises and their leadership, as well as a number of politicians and other individuals. ! e so-called “50% Rule” states: any person who owns more than 50% of the charter capital of an organization that is subject to blocking or sectoral sanctions is also considered the subject of these sanctions. Sectoral Sanctions Identifications (SSIs) are measures that restrict transactions and operations against companies from specific sectors of the economy. ! e property and property rights of participants in the SSI list are not considered blocked.

– Where can one get the relevant data on the latest sanctions requirements? 

Mr. Tuvaev – The US Treasury website is such a primary source. It is necessary to monitor all types of new acts, as well as recommended compliance programs. But all this is ineffective without understanding, ability to interpret, and without the introduction of clear instructions for employees to comply with sanctioned risk management.

Interview with Karnoukhov Evgeny, Managing partner. Head of Dispute Resolution Practice, and Rod Tuvaev, Head of Sanctions Law Practice Alliance Legal CG. Of counsel on Export Control, Sanction & Trade Compliance.
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#27.07.20