For businesses, assessing sanction violation and circumvention risks is crucial
We actively monitor payments and other financial transactions in our bank to ensure compliance with international sanctions imposed on Russia, Belarus, and other sanctioned countries.
We actively monitor payments and other financial transactions in our bank to ensure compliance with international sanctions imposed on Russia, Belarus, and other sanctioned countries.
"However, it is important for everyone to be vigilant because many companies and organizations in third countries actively seek vulnerabilities through which they can acquire sanctioned goods," noted lawyer Aleksi Pursiainen during an organized webinar by OP Corporate Bank.
The highest risk of violating sanctions and facing accountability, as well as damaging the reputation of companies, lies with international trade businesses. However, other sectors also face this risk: organizations engaged in public procurement, logistics and transportation service providers, media, and many other businesses.
As observed by the Lithuanian Banking Association, there have been significant changes in the dual-use and sanctioned goods routes in Lithuania recently, which may be linked to potential cases of circumvention and avoidance of sanctions.
Giedrius Kiaulakis, AML expert of Lithuanian branch, advises that every business should carefully assess risks, establish processes, and train teams on how to identify and prevent sales operations that could violate or bypass sanctions.
According to experts, circumvention of sanctions is regarded as seriously as direct violation, so such operations should not be overlooked. Here are three key pieces of advice on how to avoid it:
- Top-level executives should understand the potential consequences and risks. In some countries, failure to comply with sanctions and their circumvention can result in criminal liability.
- It is important to establish risk assessment procedures so that employees are aware that recent changes in address or a request not to attach a sticker indicating that the product is made in the EU, an atypical buyer who knows nothing about your equipment, or the purchase of goods unrelated to the buyer's business activities – all these factors are risks that should trigger additional evaluation processes.
- Act in a socially responsible manner – residents and communities expect businesses not to provide opportunities for sanctioned countries to bypass restrictions and obtain prohibited goods and services.