Global Issues Forum: The Ever-Evolving Ukraine/Russia Sanctions Regime

Transcription

1 Glbal Issues Frum: The Ever-Evlving Ukraine/Russia Sanctins Regime Presented by: Ignaci E. Sanchez, C-Chair Gvernment Affairs Practice, DLA Piper LLP Octber 15, :30 2:00 p.m.

2 Presenter Ignaci E. Sánchez is a partner with DLA Piper and is C- Chair f the firm s U.S. Gvernment Affairs practice. Fr many years, he has been actively invlved in advising clients n the applicatin f U.S. ecnmic sanctins and the legal and plitical issues related t thse sanctins. He has represented clients n matters related t these issues befre the Treasury Department s Office f Freign Assets Cntrl (OFAC), Department f Justice, State Department, U.S. Trade Representative, Natinal Security Cuncil, White Huse Cunsel, Department f Cmmerce and varius inter-agency task frces cncerning the applicatin f U.S sanctins. He has assisted clients in addressing and minimizing their cmpliance risks. He has helped clients establish r review cmpany plicies and prcedures, perfrm internal audits and establish imprved cmpliance plans and training. He has als assisted clients in btaining apprpriate licenses frm the relevant agencies f the federal gvernment. If necessary, he has extensive experience in enfrcement matters and has represented clients in vluntary disclsures, enfrcement (penalty) matters, and investigative situatins.

3 Overview Part I General Overview f Sanctins U.S. Extraterritrial Part II Ukraine-related (Russia) Sanctins Part III Practical Steps 3

4 PART I GENERAL OVERVIEW 4

5 Ecnmic Sanctins U.S. Treasury Department - Office f Freign Assets Cntrl (OFAC) Enfrces the majrity f sanctins applicable t US persns r entities Jurisdictin ver US Persn and US Assets Pwer cmes frm general statutes IEEPA & TWEA Enfrced thrugh presidential pwer and delegated authrity Executive Orders Regulatins 5

6 IEEPA Sectin U.S. Cde Unusual and extrardinary threat; declaratin f natinal emergency; exercise f Presidential authrities (a) Any authrity granted t the President by sectin 1702 f this title may be exercised t deal with any unusual and extrardinary threat, which has its surce in whle r substantial part utside the United States, t the natinal security, freign plicy, r ecnmy f the United States, if the President declares a natinal emergency with respect t such threat. (b)the authrities granted t the President by sectin 1701 f this title may nly be exercised t deal with an unusual and extrardinary threat with respect t which a natinal emergency has been declared fr purpses f this chapter and may nt be exercised fr any ther purpse. Any exercise f such authrities t deal with any new threat shall be based n a new declaratin f natinal emergency which must be with respect t such threat. 6

7 IEEPA Sectin 1702 (a) In general (1) At the times and t the extent specified in sectin 1701 f this title, the President may, under such regulatins as he may prescribe, by means f instructins, licenses, r therwise (A) investigate, regulate, r prhibit (i) any transactins in freign exchange, (ii) transfers f credit r payments between, by, thrugh, r t any banking institutin, t the extent that such transfers r payments invlve any interest f any freign cuntry r a natinal theref, (iii) the imprting r exprting f currency r securities, by any persn, r with respect t any prperty, subject t the jurisdictin f the United States; (B) investigate, blck during the pendency f an investigatin, regulate, direct and cmpel, nullify, vid, prevent r prhibit, any acquisitin, hlding, withhlding, use, transfer, withdrawal, transprtatin, imprtatin r exprtatin f, r dealing in, r exercising any right, pwer, r privilege with respect t, r transactins invlving, any prperty in which any freign cuntry r a natinal theref has any interest by any persn, r with respect t any prperty, subject t the jurisdictin f the United States; and. (C) when the United States is engaged in armed hstilities r has been attacked by a freign cuntry r freign natinals, cnfiscate any prperty, subject t the jurisdictin f the United States, f any freign persn, freign rganizatin, r freign cuntry that he determines has planned, authrized, aided, r engaged in such hstilities r attacks against the United States; and all right, title, and interest in any prperty s cnfiscated shall vest, when, as, and upn the terms directed by the President, in such agency r persn as the President may designate frm time t time, and upn such terms and cnditins as the President may prescribe, such interest r prperty shall be held, used, administered, liquidated, sld, r therwise dealt with in the interest f and fr the benefit f the United States, and such designated agency r persn may perfrm any and all acts incident t the accmplishment r furtherance f these purpses. 7

8 Ecnmic Sanctins Purpse: Gvernments and nn-gvernmental rganizatins implement ecnmic and trade sanctins t Further natinal security and freign plicy gals; Therefre, they change ver time (smetimes very quickly) Restrict r prhibit cmmercial transactins; and Advise the public abut individuals, entities and grups wh may present risk t these gals.

9 Targets Cuntries/Regins/Gvernments (Cuba, Iran, Sudan and Syria) Individuals (e.g., Igr Sechin, CEO f Rsneft)) Entities (e.g., Bank Saderat and Bank Melli) Organizatins (e.g., Hezbllah, FARC) Vessels (e.g., thse perated by IRISL)

10 U.S. Ecnmic Sanctins Prgrams Types Cuntry sanctins Prhibit U.S. Persns frm engaging in mst activities with a sanctined cuntry r gvernment Cuba Iran Sudan (nt Suth Sudan) Syria List-based sanctins Prhibit U.S. Persns frm engaging in activities with designated individuals, entities, rganizatins, and vessels OFAC s List f Specially Designated Natinals and Blcked Persns (the SDN List ). 10

11 List-Based Sanctins U.S. Persns cannt have any dealings with individuals, entities and rganizatins n the SDN List. Amng ther individuals and entities, the SDN List includes designated: Terrrists and terrrist rganizatins; Narctics traffickers; Persns invlved in the prliferatin f weapns f mass destructin; Mney launderers; and Individuals, entities and rganizatins that the U.S. Gvernment cnsiders t be extensins r arms f sanctined persns r gvernments. OFAC cntinually revises and adds names t the SDN List.

12 Blcking Intentinally Brad What is meant by blcked prperty r freezing assets? U.S. law requires U.S. persns t "blck" (i.e., "freeze") all prperty in which a sanctins target has an interest. The term blcked is defined as suspending all transactin activity and securing the prperty. The term "prperty" is defined bradly t include: Physical prperty; Payments; Bank accunts; Debts; Cntracts; Intellectual prperty; and/r Other frms f prperty tangible, intangible, future, cntingent, direct, indirect, etc.

13 Blcked Persns New Guidance August 13, 2014 Guidance: Persns whse prperty and interests in prperty are blcked pursuant t an Executive Order r regulatins administered by OFAC (blcked persns) are cnsidered t have an interest in all prperty and interests in prperty f an entity in which such blcked persns wn, whether individually r in the aggregate, directly r indirectly, a 50 percent r greater interest. Cnsequently, any entity wned in the aggregate, directly r indirectly, 50 percent r mre by ne r mre blcked persns is itself cnsidered t be a blcked persn. The prperty and interests in prperty f such an entity are blcked regardless f whether the entity itself is listed in the annex t an Executive rder r therwise placed n OFAC's list f Specially Designated Natinals ("SDNs"). Accrdingly, a U.S. persn generally may nt engage in any transactins with such an entity, unless authrized by OFAC. U.S. persns are advised t act with cautin when cnsidering a transactin with a nn-blcked entity in which ne r mre blcked persns has a significant wnership interest that is less than 50 percent r which ne r mre blcked persns may cntrl by means ther than a majrity wnership interest. Such entities may be the subject f future designatin r enfrcement actin by OFAC. Furthermre, a U.S. persn may nt prcure gds, services, r technlgy frm, r engage in transactins with, a blcked persn directly r indirectly (including thrugh a third-party intermediary).

14 Evasin & Facilitatin Facilitatin and Evasin are general cncepts fund in sanctins prgrams enacted under IEEPA. Facilitatin: N United States persn, wherever lcated, may apprve, finance, facilitate, r guarantee any transactin by a freign persn where the transactin by that freign persn wuld be prhibited by this part if perfrmed by a United States persn r within the United States. Evasin: (a) Any transactin n r after the effective date that evades r avids, has the purpse f evading r aviding, causes a vilatin f, r attempts t vilate any f the prhibitins set frth in this part is prhibited. (b) Any cnspiracy frmed t vilate any f the prhibitins set frth in this part is prhibited.

15 Wh must cmply? U.S. Persns must cmply U.S. cmpanies: Any cmpany incrprated/maintaining a principal place f business in the U.S.; and Nn-U.S. branches. Individuals: U.S. citizens (regardless f lcatin in the wrld); U.S. permanent residents (regardless f lcatin in the wrld); and Any persns lcated in the U.S. (regardless f natinality). Sanctins targeting Cuba and Iran als apply t all freign subsidiaries f U.S. cmpanies and ther entities wned r cntrlled by U.S. Persns. Currently, the remaining prgrams d nt apply t freign subsidiaries f U.S. cmpanies, but dealings may still be prhibited if they invlve U.S. Persns (e.g., U.S. parent cmpany) r cntrl by U.S. Persns. 15

16 US Persns U.S. Persns cannt: Apprve dealings with sanctins targets by nn-u.s. Persns. Facilitate dealings with sanctins targets by nn-u.s. Persns. Finance dealings with sanctins targets by nn-u.s. Persns. Fr example, a U.S. Persn must nt: Apprve a transactin undertaken by its nn-u.s. entity with a sanctined cuntry r party; Prvide financial supprt fr a transactin invlving a sanctined cuntry r party; Prvide technical r peratinal supprt fr a transactin with a targeted cuntry r party, such as prviding financial analysis frm a U.S. cmpany; r Refer prhibited business t a nn-u.s. affiliate. U.S. sanctins laws als prhibit U.S. Persns frm engaging in transactins that evade, r have the purpse r effect f evading, sanctins laws.

17 U.S. Persn? In the glbal cntext, determining the level f cntrl exercised by a US parent ver a freign subsidiary (such as t give rise t liability under U.S. sanctins) requires a review f the ttality f the circumstances. Prblem issues: Authrity delegated by parent Glbal business units r prduct lines run ut f r managed frm the U.S. U.S. centralized cntrls ver freign subsidiaries Fiscal and budgetary cntrls Internal Audit & Legal IT systems and ther centralized supprt systems U.S. persns wrking in freign subsidiaries in high-level management rles Capital/Liquidity cntributins frm parent, if necessary. Glbal Emplyee and Executive Stck Optin Plans and ther glbal benefits. Overlapping directrs and fficers US parent apprval f business strategies 17

18 Licenses & Guidance OFAC may authrize therwise prhibited activity in ne f tw ways: OFAC may create explicit exceptins t sanctins prgrams, generally referred t as general licenses. General licenses apply t all U.S. persns. Examples f general licenses include: Under several f the cuntry-based sanctins prgrams, OFAC has issued standing general licenses authrizing transactins incidental t the prvisin f telecmmunicatins and/r mail services. Upn applicatin by a U.S. persn, OFAC may grant specific exceptins t sanctins prgrams thrugh the issuance f specific licenses. Examples f specific licenses include: Fr example, several U.S. financial institutins hld OFAC licenses authrizing them t ffer banking services t diplmatic representatives f sanctined gvernments. OFAC als may publish frmal interpretative rulings abut the scpe f U.S. sanctins. Examples f interpretive rulings include: OFAC has prvided guidance t a cmpany in the travel industry regarding the scpe f permissible activity invlving cmputer reservatins systems (CRS) that may facilitate travel t Cuba frm third cuntries. OFAC als publishes FAQs 18

19 Penalties Individuals Individuals wh vilate U.S. sanctins may be subject t: Civil penalties Fines up t: (i) $65,000 per vilatin; (ii) $250,000 per vilatin r twice the value f the transactin, whichever is greater; r (iii) $1,075,000 per vilatin, depending n the sanctins prgram. Seizure and frfeiture f prperty invlved in a transactin, including funds, securities r gds. Criminal penalties Fines up t: (i) the greater f $250,000 r twice the pecuniary gain r lss in the transactin; (ii) $1 millin; r (iii) $5 millin, depending n the sanctins prgram; and/r Imprisnment up t: (i) 10 years; (ii) 20 years; r (iii) 30 years, depending n the sanctins prgram.

20 Penalties Crpratins r Entities U.S. entities that vilate U.S. sanctins may be subject t: Civil penalties: Fines up t: (i) $65,000 per vilatin; (ii) $250,000 per vilatin r twice the value f the transactin, whichever is greater; r (iii) $1,075,000 per vilatin; and/r; Seizure and frfeiture f prperty invlved in a transactin, including funds, securities r gds. Criminal penalties: Fines between $1,000,000 $10,000,000 fr each willful vilatin f U.S. sanctins laws r regulatins. Vilatins may als result in substantial adverse publicity fr the U.S. crpratin and cmprmise the business reputatin fr integrity.

21 Recent OFAC Enfrcement Fines BNP Paribas $963 millin (part f $8.9 billin settlement with federal and state gvernment agencies) HSBC Hldings PLC $375 millin ING Bank NV $619 millin JP Mrgan Chase $88 millin Standard Chartered PLC $132 millin Llyds TSB Bank $217 millin

22 Extraterritrial Ecnmic Sanctins U.S. Department f State Enfrces extraterritrial sanctins Asserts indirect jurisdictin ver nn-us entities r cnduct Deprives vilatrs f certain privileges in the U.S. Enabled thrugh specific and targeted statutes Why did Cngress get invlved? 22

23 Extraterritrial Sanctins Enacted by Cngress. At this time, mstly Iran-related. Target nn-u.s. persns wh are ding certain business with Iran. Enumerated types f transactins fcusing n Iran s energy sectr. Mst fcus n investment, financing and insurance N fines Enfrced by denying the ffender certain privileges r benefits f the U.S. marketplace. Cntain liability triggers transactins with Iran that wuld be cnsidered vilatins and culd cause a firm r entity t be sanctined under the law s prvisins.

24 Extraterritrial Sanctins Penalties Must apply 5 f: Denial f Exprt-Imprt Bank lans, credits, r credit guarantees fr U.S. exprts t the sanctined entity. Denial f licenses fr the U.S. exprt f military r militarily useful technlgy t the entity. Denial f U.S. bank lans exceeding $10 millin in ne year t the entity. If the entity is a financial institutin, a prhibitin n its service as a primary dealer in U.S. gvernment bnds; and/r a prhibitin n its serving as a repsitry fr U.S. gvernment funds (each cunts as ne sanctin) Prhibitin n U.S. gvernment prcurement frm the entity. Prhibitins in transactins in freign exchange by the entity. Prhibitin n any credit r payments between the entity and any U.S. financial institutin. Prhibitin f the sanctined entity frm acquiring, hlding, using, r trading any U.S.-based prperty which the sanctined entity has a (financial) interest in. Restrictin n imprts frm the sanctined entity. A ban n a U.S. persn frm investing in r purchasing significant amunts f equity r debt instruments f a sanctined persn. Exclusin frm the United States f crprate fficers r cntrlling sharehlders f a sanctined firm. Impsitin f any f the listed sanctins n principal ffices f a sanctined firm. Mandatry sixth prhibitin n cntracts with the U.S. gvernment.

25 PART II UKRAINE-RELATED (RUSSIA) SANCTIONS

26 Timeline E.O (3/6/2014) E.O (3/17/2014) E.O (3/20/2014) Ukraine-related Sanctins Regulatins, 31 CFR Part 589 (5/8/2014) Directives 1 & 2 (7/16/2014) General License 1 (7/16/2014) Directives 1 & 2 amended (9/12/2014) Directives 3 & 4 (9/12/2014) General Licenses 1A & 2 (9/12/2014) General License 3 (10/6/2014)

27 Escalatin f Executive Orders I, Barack Obama, President f the United States f America, find that the actins and plicies f persns that undermine demcratic prcesses and institutins in Ukraine cnstitute an unusual and extrardinary threat t the natinal security and freign plicy f the United States, and I hereby declare a natinal emergency t deal with that threat. I hereby rder: I, Barack Obama, President f the United States f America, hereby expand the scpe f the natinal emergency declared in Executive Order finding that the actins and plicies f the Gvernment f the Russian Federatin with respect t Ukraine cnstitute an unusual and extrardinary threat t the natinal security and freign plicy f the United States. Accrdingly, I hereby rder: I, Barack Obama, President f the United States f America, hereby expand the scpe f the natinal emergency declared in Executive Order and finding that the actins and plicies f the Gvernment f the Russian Federatin, cnstitute an unusual and extrardinary threat t the natinal security and freign plicy f the United States. Accrdingly, I hereby rder:

28 Executive Order Sectin 1. (a) All prperty and interests in prperty that are in the United States, that hereafter cme within the United States, r that are r hereafter cme within the pssessin r cntrl f any United States persn (including any freign branch) f the fllwing persns are blcked and may nt be transferred, paid, exprted, withdrawn, r therwise dealt in: any persn determined by the Secretary f the Treasury, in cnsultatin with the Secretary f State (cnduct described and persns listed in Annex which is incrprated int the SDN List). Sec. 4. The prhibitins in sectin 1 f this rder include but are nt limited t: (a) The making f any cntributin r prvisin f funds, gds, r services by, t, r fr the benefit f any persn whse prperty and interests in prperty are blcked pursuant t this rder; and (b) the receipt f any cntributin r prvisin f funds, gds, r services frm any such persn. Sec. 5 sets frth a specific evasin prhibitin.

29 Executive Order Sectin 1. (a) All prperty and interests in prperty that are in the United States, that hereafter cme within the United States, r that are r hereafter cme within the pssessin r cntrl f any United States persn (including any freign branch) f the fllwing persns are blcked and may nt be transferred, paid, exprted, withdrawn, r therwise dealt in: any persn determined by the Secretary f the Treasury, in cnsultatin with the Secretary f State (cnduct described and persns listed in Annex which is incrprated int the SDN List). Sec. 4. The prhibitins in sectin 1 f this rder include but are nt limited t: (a) The making f any cntributin r prvisin f funds, gds, r services by, t, r fr the benefit f any persn whse prperty and interests in prperty are blcked pursuant t this rder; and (b) the receipt f any cntributin r prvisin f funds, gds, r services frm any such persn. Sec. 5 sets frth a specific evasin prhibitin.

30 Russian/Ukrainian SDNs E.O listed (19 individuals, 4 entities) E.O listed (38 individuals, 32 entities) Bris and Arkady Rtenberg (Billinaire c-wners f SMP Bank and SGM Grup, a majr supplier f cnstructin services t Russian gas giant Gazprm Frbes.cm). Igr Sechin (CEO f Rsneft Oil CO. and frmer Deputy Chief f Staff t Vladimir Putin) Bank Rssiya (the persnal bank f the Russian inner circle)

31 Executive Order Sectin 1. (a) All prperty and interests in prperty that are in the United States, that hereafter cme within the United States, r that are r hereafter cme within the pssessin r cntrl f any United States persn (including any freign branch) f the fllwing persns are blcked and may nt be transferred, paid, exprted, withdrawn, r therwise dealt in: any persn determined by the Secretary f the Treasury, in cnsultatin with the Secretary f State: (i) t perate in such sectrs f the Russian Federatin ecnmy as may be determined by the Secretary f the Treasury, in cnsultatin with the Secretary f State, such as financial services, energy, metals and mining, engineering, and defense and related materiel; (ii) t have materially assisted, spnsred, r prvided financial, material, r technlgical supprt fr, r gds r services t r in supprt f, any persn whse prperty and interests in prperty are blcked pursuant t this rder; r (iii) t be wned r cntrlled by, r t have acted r purprted t act fr r n behalf f, directly r indirectly, any persn whse prperty and interests in prperty are blcked pursuant t this rder.

32 Executive Order Sec. 4. The prhibitins in sectin 1 f this rder include but are nt limited t: (a) the making f any cntributin r prvisin f funds, gds, r services by, t, r fr the benefit f any persn whse prperty and interests in prperty are blcked pursuant t this rder; and (b) the receipt f any cntributin r prvisin f funds, gds, r services frm any such persn. Sec. 5. (a) Any transactin that evades r avids, has the purpse f evading r aviding, causes a vilatin f, r attempts t vilate any f the prhibitins set frth in this rder is prhibited. (b) Any cnspiracy frmed t vilate any f the prhibitins set frth in this rder is prhibited.

33 OFAC Regulatins UKRAINE RELATED SANCTIONS REGULATIONS 31 CFR Part Prhibited transactins. All transactins prhibited pursuant t Executive Order f March 6, 2014, Executive Order f March 16, 2014, and Executive Order f March 20, 2014 ( Ukraine-Related Executive Orders ), are als prhibited pursuant t this part Effect f transfers vilating the prvisins f this part. (a) Any transfer after the effective date that is in vilatin f any prvisin f this part r f any regulatin, rder, directive, ruling, instructin, r license issued pursuant t this part, and that invlves any prperty r interest in prperty blcked pursuant t , is null and vid and shall nt be the basis fr the assertin r recgnitin f any interest in r right, remedy, pwer, r privilege with respect t such prperty r prperty interests.

34 Directives 1 & 2 July 16, 2014 Tw directives prhibit certain transactins n a ging-frward basis. Directive 1 f E.O prhibits transacting in, prviding financing fr r therwise dealing in debt with a maturity f lnger than 90 days r equity if that debt r equity is issued after n r after July 16, 2014 (the applicable sanctins effective date) ( new debt r new equity ) by, n behalf f, r fr the benefit f the persns perating in Russia s financial sectr named under Directive 1, their prperty, r their interests in prperty. The persns r entities targeted by Directive 1 are listed in the directive. Directive 2 f E.O separately prhibits transacting in, prviding financing fr r therwise dealing in new debt issued n r after July 16, 2014 f greater than 90 days maturity by, n behalf f r fr the benefit f the persns perating in Russia s energy sectr named under the Directive 2, their prperty, r their interests in prperty. Directive 2 des nt cntain the new equity prvisin. The persns r entities targeted by Directive 2 are listed in the directive. These tw directives are nt a blcking actin; therefre, pre-existing transactins nt affected. Nr are the persns r entities identified in Directives 1 and 2 added t the SDN list.

35 Amended Directive 1 Targets Russian financial sectr (financing and equity) Treasury tightened the debt financing restrictins under Amended Directive 1 f the SSI prgram by reducing frm 90 days t 30 days the maturity perid fr newly issued debt. Banks targeted by Amended Directive 1: Sberbank f Russia Gazprmbank OAO Bank f Mscw Russian Agricultural Bank VEB Bank (VNESHECONOMBANK) VTB Bank List/Pages/ssi_list.aspx

36 Amended Directive 2 Targets financing fr the Russian energy sectr N substantive change t Directive 2 Energy cmpanies targeted by Amended Directive 1: AK Transneft OAO OAO Nvatek OJSC Gazprm Neft OJSC Rsneft Oil Cmpany OJSC Gazprm List/Pages/ssi_list.aspx

37 Directive 3 Targets the Russian defense and related materiel sectr Prhibits U.S. persns frm all transactins in, prvisin f financing fr, and ther dealings in new debt f lnger than 30 days maturity f persns determined t be subject t this Directive, their prperty, r their interests in prperty. All ther activities with these persns r invlving their prperty r interests in prperty are permitted, prvided nt therwise prhibited by E.O , 13661, r r any ther sanctins prgram. Target f Directive 3 is Rstec, a majr Russian cnglmerate ( List/Pages/ssi_list.aspx).

38 Directive 4 Targets trade supprt fr the Russian energy sectr Prhibits U.S. persns frm the prvisin, exprtatin, r reexprtatin, directly r indirectly, f gds, services (except fr financial services), r technlgy in supprt f explratin r prductin fr deepwater, Arctic ffshre, r shale prjects that have the ptential t prduce il in the Russian Federatin, r in maritime area claimed by the Russian Federatin and extending frm its territry, and that invlve any persn determined t be subject t this Directive, its prperty, r its interests in prperty. Targets (subject) f Directive 4: OJSC Gazprm, OJSC Gazprm Neft, Lukil OAO, OJSC Rsneft Oil Cmpany and Surgutneftegas List/Pages/ssi_list.aspx

39 PART III PRACTICAL STEPS

40 Sanctins Cmpliance infrastructure D yu have an ecnmic sanctins cmpliance prgram? Has it been updated? Wh des it apply t? The sanctins cmpliance prgram shuld address the fllwing: Risk Assessment (at least annually) Written plicies, prcedures and internal cntrls (including screening) Cnflicts f law Training Mnitring Auditing

41 Screening & Due Diligence KYC check the names f all ptential parties t a transactin against the OFAC SDN and SSI lists. Wh shuld be screened? Custmers Vendrs Cunterparties Cntractual JV Investments Owners (must determine whether the parties are wned 50 percent r mre by an SDN). Directrs and Officers Transactin due diligence Parties Business practices

42 Screening When shuld screening be perfrmed? Befre entering a business dealing When ntified f a change t a party s name r address Peridically pst-inceptin Prir t making any payment Ensure that third party service prviders (agents) are cntractually bund t screen data. Keep and maintain recrds f screening.

43 Screening What shuld a cmpany d if it btains a psitive SDN/SSI hit? Refer the matter t apprpriate legal/cmpliance team fr instructins n hw t prceed. The apprpriate respnse may include blcking the transactin and reprting the matter t OFAC 10 days t file a Blcked Prperty Reprt with OFAC When a transactin is blcked, n cntract will be signed r vided, n payment will be made, and n further perfrmance can be taken. Cmmunicatins with the affected cunterparty shuld be managed thrugh legal/cmpliance fficer t ensure cmpliance with all applicable laws and plicies. Assess any ptential vilatins Arising frm existing match Other similar matters Cnsider ther interactin with OFAC

44 Future Cmpliance Issues T the extent that yur cmpany has business r business relatinships in r related t Russia that have nt yet been impacted by sanctins, yu shuld: Identify and understand fully any and all direct and indirect business ties t Russia Assess the business cnsequences f ptential transactins r business ties with SDNs r SSI named parties Direct Indirect facilitatin Implement apprpriate legal measures t prtect against and minimize the cnsequences f future sanctins prhibitins Reps and Warranties Cntractual prhibitins Remedies Chice f law Chice f frum

45 QUESTIONS