This week on the FCPA Compliance Report, I began a two-part podcast series on the potential U.S. sanctions if Russia invades Ukraine and what can be done to prepare. The guest and subject matter expert for the podcast was Matt Silverman, Director of Trade Compliance at VIAVI. Now that Russia has invaded Ukraine, I thought the need was even greater to get this information out. This blog post highlights Matt’s thoughts on both topics. I urge to listen to the two podcasts in their entirety to understand what sanctions might be levied and how you can help your company prepare a response.

• What are the potential U.S. sanctions if Russia invades Ukraine?
  1. Impose a comprehensive or near-complete embargo of Russia.
  2. Impose additional sectoral sanctions on certain Russian industries.
  3. Prohibit exports of certain items or technology to Russia.
  4. Designate Russian entities under the Foreign Direct Product Rule.
  5. Add specific Russian entities or individuals to OFAC’s Specially Designated Nationals and Blocked Persons List (“SDN”).
  6. Prohibit Russian entities from accessing the U.S. financial system/using U.S. dollars and/or sanctioning foreign banks that conduct transactions with sanctioned Russian entities.
  7. Prohibit U.S. persons or entities from investing in Russian companies, requiring divestment, and/or sanctioning foreign entities that buy Russian government bonds.
  8. Impose “secondary sanctions” on entities or individuals that conduct certain transactions with Russia.
  9. Freeze Russian assets located in the U.S.
  10. Ban U.S. financial assistance to Russian entities.
  11. Withhold U.S. aid to any organizations that assist Russia.
  12. Prohibit imports and/or impose high tariffs on specific Russian imports.
  13. S. State-Level Sanctions: States may enact laws that prohibit business with, or require divestment of shares in, firms that conduct certain transactions with Russia.
• What can be done to prepare?
  • First, ascertain your exposure and consider how some or all of these actions would impact your business.
  • Check your sanctions screening policies and procedures and check your customers and business partners in real time against global sanctions lists.
  • Identify all of your contracts with Russian entities or individuals and review your contracts for compliance with law clauses, notice clauses, and termination provisions.
  • Know your customer.
  • Identify what, if any, items, or technology you are exporting to Russia and any transactions with Russian entities that have ongoing or continuing obligations.
  • Take a look at your supply chain to avoid business interruption.
  • Identify whether you have any outstanding debts from Russian entities or individuals, and, if so, promptly purse collection activities.
  • Identify any procurement or manufacturing activities for goods intended for Russia and consider whether you can safely postpone or delay those activities, especially if you are dealing with specially designed or non-fungible goods (without breaching any contracts or risking failure to meet deadlines).

Resources
Matt Silverman on the potential U.S. sanctions if Russia invades Ukraine. (Part 1)
Matt Silverman on What can be done to prepare your company. (Part 2)