September 2022- Are You Prepared for Compliance with U.S. Sanctions Enforcement?

The United States is among several countries that have imposed broad sanctions on Russia and its oligarchs in response to the war in Ukraine. The sanctions affect multiple industries, as the U.S. and its allies have sought to isolate Russia economically and put intense pressure on those with influence on the Russian government. This pressure naturally flows down to corporate entities internationally.

While companies may voluntarily cease doing business tied to Russia as a show of solidarity or purely to avoid risk, government agencies will expect full compliance so that sanctions have their intended impact in the current paradigm. The Department of Justice has indicated enforcement is a top priority in its comprehensive strategy for combating white-collar crime.

Organizations worldwide are now reassessing business strategies and relationships to be clear on their obligations under the expanded restrictions. Prudent companies are reevaluating their compliance programs, but deciding where to begin can be overwhelming.

A key starting point should be assessing the scope of regulated activities and the impact on doing business. Additionally, the Treasury Department’s Office of Foreign Assets Control provides guidance on developing a sanctions compliance program. Its Framework for OFAC Compliance Commitments strongly recommends using a sanctions risk-based approach in evaluating relationships with customers and counterparties throughout supply chains as well as with intermediaries. Risks may also arise in the sale of products and services and resulting from operations in certain geographic locations.

Along with risk assessment, other essential elements of a comprehensive compliance program include internal controls, testing and auditing, management commitment and training.

Lauren Tringali, associate director of legal solutions at QuisLex, and David Olener, associate director of legal solutions at QuisLex, addressed these issues in an article published recently by the National Law Journal. Read the full article on Risk Assessment: The Impact of the War in Ukraine for more of their insight.