As the physical horrors of war unfold in Ukraine, the global community has responded with an economic and financial war against the aggressor, Russia.
The sanctions imposed on Russia by many countries, including Australia, are strict and punishing – and all organisations regulated by AUSTRAC must comply with them.
What sanctions do you have to comply with?
Generally speaking, as a reporting entity, you’re required to comply with all sanctions and countermeasures implemented by the Australian government. These are set out in various pieces of legislation.
For Russia, the sanctions are extremely broad, targeting individuals, entities and systems including banking, energy and trade.
This doesn’t mean you need to know the content of every sanction, but you do need to know how to make sure you’re complying with them.
How do you comply with the sanctions?
For practical purposes, the sanctions don’t automatically stop you from dealing with people holding Russian citizenship.
However, you should undertake enhanced due diligence on any Russian customers/beneficial owners or customers/beneficial owners with Russian links.
These extra steps should include:
- Searching DFAT’s consolidated list of sanctions for specific individuals and entities; and
- Maintaining vigilance over source of funds and source of wealth for these clients to ensure that no dealings would contravene the current Russian/Ukraine sanctions regime, in particular that there are no links to publicly-owned or controlled Russian banks (or their subsidiaries)
The same precautions would apply in the unlikely situation that you’re dealing with someone from/linked to the rebel territories of Donetsk and Luhansk in Ukraine.
Kit Legal will keep our clients up to date on any changes that impact their ongoing AML obligations, but please also refer to your AML/CTF program on the DCP for more information.