In the aftermath of Russia's invasion of Ukraine, the Central Bank of Ireland (CBI), like many other international state actors and Central Banks have published details of new restrictive measures / sanctions that are to be adopted.
All natural and legal persons must comply with EU Regulations relating to financial sanctions as soon as they are adopted. While sanctions are applicable to all natural and legal persons, the CBI has provided some additional guidance given the nature of the activities carried out by credit and financial institutions.
Once any person, entity or body has been sanctioned under EU financial sanctions, there is a legal obligation not to transfer funds or make funds or economic resources available, directly or indirectly to that person, entity or body. Accounts, funds, or other assets belonging to that person, entity or body should be frozen without delay so that they cannot be made available directly or indirectly to that sanctioned, person, entity or body.
The CBI provided guidance to credit and financial institutions as follows:
- Regulated firms should continuously monitor the EU Financial Sanctions List
- In the event that a match or a hit occurs against the sanctioned person, entity or body, a regulated firm must immediately freeze the accounts and / or stop the transactions and report the "hit" to the CBI using a sanctions return form, available on the CBI website. Before submitting the report to the CBI, firms should take reasonable steps to ensure that the person, entity or body identified is the same person, entity or body as that listed in the relevant sanctions list
- In certain specific circumstances a person may be authorised to make a transfer to a sanctioned person, entity or body if a prior authorization is received or where notification is given to a competent authority in accordance with the EU Regulations. Such authorization must be sought specifically from the CBI in the first instance
If parties are aware of possible violations of any EU sanctions, they can bring this to the attention of the European Commission by voluntarily providing information through the EU sanctions whistleblower tool.
As of 22 March, the CBI have published amendments to the Sanctions Lists on 23 February 2022, 25 February 2022, 28 February 2022, 2 March 2022, 9 March 2022 and last on 15 March 2022. The published sanctions extend to a wide range of Russian business interests, banks and public officials and limit access by certain Russian entities to EU Capital Markets, prohibits the listing or provision of services in relation to shares of Russian state owned entities, and limits financial inflows from Russia to the EU by prohibiting the acceptance of deposits exceeding certain values from Russian nationals or residents, or the selling of Euro denominated securities to Russian clients.
The sanctions regime targeted at Russia is one of the widest ranging sought to date and the first time such measures have been applied against a G20 economy. The unprecedented measures such as excluding Russian banks from the SWIFT payment system also reflect the seriousness with which economic pressures are being sought to be placed on Russia. It remains to be seen how effective this form of economic war and sanctions regime will prove to be in the context of a major state actor such as Russia.
See the CBI's dedicated page on Russia/Ukraine sanctions here.