How the Russia/Ukraine experience will inform possible future sanctions strategies
Abstract
The Russian invasion of Ukraine has led to an unprecedented expansion of sanctions against a major economy, physically and economically connected to Europe. The expansion of designation criteria and the increase in trade-based measures targeting specific sectors of the Russian economy have blurred the lines between sanctions and export controls. Trade sanctions now account for 80 per cent of the sanctions imposed against Russia. This is creating new challenges for those that have an obligation to comply with the measures. The introduction of measures, such as ‘person connected with Russia’ and the focus on preventing circumvention and evasion, has highlighted the need for sanctions teams to understand politically exposed person (PEP) risk rating and trade-based moneylaundering (TBML) methodologies, highlighting the need for collaboration between sanctions and anti-money laundering (AML) teams. Innovative measures such as the Oil Price Cap exception show new ground being broken for Russia sanctions and it is possible that some of these measures will be issued under additional regimes in future. While Russia remains a significant focus, it is only one of the nearly 40 regimes enacted; there is a growing emphasis on targeting enablers in various countries, including Iran, the Democratic People’s Republic of Korea (DPRK) and China. The UK autonomous sanctions landscape, while still recent is evolving quickly and testing the ability of regulators and government departments to provide clear legislation, regulation and guidance to ensure that UK sanctions achieve their aims effectively. Effective sanctions are a whole society challenge, involving multiple sectors and jurisdictions. Sanctions is a team sport, which will only work if we all work together. This article is also included in The Business & Management Collection which can be accessed at https://hstalks.com/business/.
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Author's Biography
Neil Whiley is the Head of Sanctions at Bank ABC, 1-5 Moorgate, London , UK, and has worked in financial services for over 25 years, specialising in sanctions compliance since 2009. He is a regular contributor to the sanctions community, and he has given evidence at parliamentary hearings. Neil has worked across retail, investment and wholesale banking environments and has worked in operations, advisory and audit giving full coverage of the first, second and third lines of defence employed in financial services sanctions teams. Neil spent almost five years heading the sanctions work at UK Finance, the UK banking trade body. During this time, Neil helped guide industry through Brexit and the escalation within sanctions and export controls due to the Russian invasion of Ukraine. This included working directly with the US and UK governments, and multiple industry sectors on complex measures such as the Oil Price Cap. He also worked to build an inclusive community of UK companies across all industry sectors and global governments to ensure that the sanctions regime was as effective as possible. He also engaged directly with governments and regulators to ensure that legislation was as clear and easy to implement as possible. Prior to his time at UK Finance, Neil spent over 10 years assisting banks with sanctions remediation programmes following significant fines from regulators. Neil holds an LLM in banking and finance law from the University of London, an MSc degree in international commercial law and Financial Crime Compliance from the University of Law; Neil is a fellow of the Society for Advanced Legal Studies.
