Sanctions against the citizens, businesses, credit institutions and certain industries like oil and aviation industries of the Russian Federation at the end of February 2022 have been implemented by most of the large economies of the world, both individually and collectively condemning the military aggression of the Russian Federation in Ukraine, its sovereignty and territorial integrity. The goal of the sanctions is to achieve the end of the aggressive military actions of the Russian Federation.
It is predicted that the list of sanctions and their scope both from the EU, the USA, and the UK, as well as in the national level most likely will expand and will be aimed at the wider scope of individuals and industries. This is why extensive review of both your clients and your business partners is essential in order to prevent risks to your economical activity and reputation.
HOW LATVIAN ENTITIES SHOULD REACT?
- An extensive review of business partners and their beneficial owners must be conducted, documentation of the results of the review must be made.
- Need to research if the beneficial owners of the business partner and individuals that exert control owner the company are not included in any of the sanction lists.
- If the aforementioned persons are included in any of the sanction lists – partnership and cooperation with the partner must be terminated.
- If the ownership structure of the business partner is difficult to understand and complicated – cooperation with the partner must be terminated.
- If there is a chance that the business partner is controlled by a person on the sanction list, cooperation can be continued, carefully overseeing the business relationship.
BDO SUPPORT IN EVALUATION OF SANCTION-INDUCED RISKS AND THEIR PREVENTION IN BUSINESS:
- Support regarding the registration of changes in ownership to Latvian companies that are directly or indirectly owned by citizens of the Russian Federation.
- Support in extensive reviews of the business partners – ownership and control structure analysis, documentation, and provision of recommendations.
- Creation of internal control system for Latvian entities that are cooperating with business partners in the Russian Federation and are subject to the risk of breaching the international and national sanctions.
- Support to credit institutions and electronic payment institutions in client identification.
- Assistance in the development and updating of internal policy and procedure.
- Review and updating of transaction monitoring procedures.
- Legal services regarding the obtaining of permit from FCMC to carry out specific transactions with the persons on sanctions lists.
If our why "People helping people" ever was important, it is right now. Please contact our specialists if your company needs support.