What is the status of the evolving international sanctions against Ukraine and Russia?

• Since the recent escalation of the Ukraine crisis in March, there have been almost daily developments regarding economic sanctions – ranging from details of implementation to proposals for new or tougher measures.
• This update is part of a series of snapshots of the current sanctions, how they apply to financial institutions doing business in or with Ukraine and Russia and their customers and counterparties, compliance requirements in different scenarios, and where sanctions might be headed in the near future.

What steps can be taken to comply with the sanctions and limit exposure?

• Key steps to manage risk under the US and EU sanctions now in place include:

– Screening parties to transactions (e.g., lenders, borrowers, guarantors, debt/equity issuers) that involve a Russian or Ukrainian element against comprehensive designated party lists;

– Performing due diligence with respect to ownership of parties to transactions, including beneficial ownership;

– Performing heightened due diligence with respect to transactions where there are red flags or otherwise may be a reason to believe a designated entity is benefiting from a transaction that on its face does not involve one;

– Considering additional contractual language, representations, warranties, covenants, and other protections in transaction documents to cover current or future Ukraine-related sanctions;

– Reviewing and ensuring that compliance programs are robust and effective, with adequate procedures and training programs, and are updated to account for the Ukraine-related sanctions;

– Monitoring and anticipating possible future sanctions; and

– Seeking OFAC or other authorization where necessary.