Expanding Ukraine and Russia Sanctions Program Presents Compliance Challenges to U.S. and European Union Businesses and Organizations

In response to Russian intervention in the Crimea, the Obama Administration and the European Union (EU) have created separate sanctions programs targeting specific individuals and businesses within Ukraine and Russia.The U.S. sanctions program presents three primary concerns for U.S. companies and individuals. First, U.S. persons should not transact business with sanctioned persons. Second, U.S. persons should monitor the sanctions program for rapid changes that come without notice. Third, U.S. persons doing business within Russia will need to watch for reciprocal economic sanctions Russia might impose.

From the EU perspective the message is similar; transactions with designated persons should not be carried out and if designated persons come to the attention of individuals or companies in the UK then they should be reported to the Treasury. Given the strong signals that the EU and UK Ministers have sent over the situation in Ukraine and the equally unyielding Russian response regarding Crimea, it appears inevitable that the ambit of the sanctions in this area will widen in the near future; those operating in the EU and UK should carefully monitor the developing situation.