Agreeing on further sanctions against Russia is proving difficult as business interests in Europe are reluctant to further damage their trade relations with Russian businesses. These existing and evolving sanctions efforts are putting pressure on financial institutions to make certain their CDD solutions and efforts are sufficient to maintain compliance with U.S. and international regulations.
Major news outlets are reporting this morning that U.S. President Barack Obama has spoken with leaders from Britain, France, Germany, and Italy, but that varying economic and security interests are making agreement difficult. Pro-Russian militants, meanwhile, continue to escalate aggressive action in eastern Ukraine.
Trade between Russia and the EU in 2012 totaled more than $370 billion, while U.S./Russian trade was only about $26 billion that year. Alison Smale and Danny Hakim reported in the New York Times yesterday that Russia’s “allies in the European private sector are conducting a separate campaign to ensure that they can maintain their deep and longstanding economic ties even if the Kremlin orders further military action.”
According to the Wall Street Journal, many Europeans are especially reluctant to apply sanctions to individual Russian businesses and executives, many of whom have benefitted tremendously by close connections with Vladimir Putin. The Europeans are lobbying instead to limit the sanctions to the Russian government and government officials.
Some financial institutions have keenly felt the burden of the sanctions in terms of customer due diligence requirements and determining whether their current KYC solutions and efforts will meet OFAC requirements where these sanctions are concerned.