On March 6, 2014, President Obama signed an Executive Order (“EO”) responding to the on-going political situation in Ukraine. The EO authorizes the US to freeze (or “block”) properties of those deemed responsible (directly or indirectly) for threatening Ukraine’s “peace, security, [and] sovereignty” or for misappropriating Ukrainian state assets. The EO also prohibits US individuals and entities from dealing with these designees.
Although none have yet been designated under the EO, we believe designations are imminent. The European Union (“EU”) designated 18 former Ukrainian government officials as part of similar measures adopted on March 5th. We expect the US’s designees to be similar.
To comply with these measures, we believe firms should (i) update their sanctions screening filters with those designated by the EU (and ultimately by the US), (ii) determine whether they are holding properties that must be blocked, (iii) prepare for the possibility of additional sanctions, and (iv) apply heightened due diligence to transactions in the region.
This Regulatory Brief provides an overview of the recent US and EU sanctions and recommends compliance measures for financial services firms.