Sanctions audit (compliance)

Mariya Dityatkovskaya — director law firm «Temida Group»

At the present stage of a severe political and economic systemic crisis and the observed economic wars between countries, the problem of risk reduction, and sometimes the question of survival of business as a whole, comes to the fore.

Analysts of Temida Group Law Firm are closely monitoring the introduction of sanctions and counter-sanctions from both the West and Russia and are developing appropriate measures to minimize negative consequences for companies with foreign participation. We have formed a separate group of lawyers, which includes lawyers from Germany, Switzerland, Canada, the United States for whom sanctions compliance has become a certain type of professional activity.
Compliance is a system of company rules which are aimed at reducing risks of violating legal norms or internal corporate restrictions. Depending on the risks, various types of compliance, such as financial, industrial, sanctions, antimonopoly, administrative or anti-corruption, are applied. Each of these compliance requirements provides for adoption of internal regulations aimed at reducing risks of committing both actions and omissions that may cause significant harm to the business as a whole or may even lead to the loss of business and bring the company's management and shareholders to personal administrative, financial or criminal liability.
Legal entities and individuals doing business not only in Russia but also abroad are obliged, on a first priority basis, to comply with the sanctions restrictions. Failure to comply with the restrictions, sooner or later, will necessarily lead to personal direct or indirect serious restrictions that will lead to significant losses or the loss of the business as a whole.
For example, any person who is not under the sanctions of the United States or Western countries may be subject to secondary sanctions if he/she directly or indirectly participated in the commission of prohibited transactions in order to circumvent already imposed sanctions or provided substantial assistance to sanctions designated persons or entities, namely material, financial or technical assistance, as well as provided work, goods and services in support of the activities of the sanctions designated persons or entities.

Secondary sanctions, as a rule, are not inferior to primary sanctions in their negative impact. These include blocking finances and other assets, bans on the movement of goods, the provision of works and services, a ban on individuals visiting a number of countries with the revocation or non-issuance of visas.
The sanctions audit includes legal, financial, tax, accounting, administrative and management audits and provides for the following measures:
The company's activities are analyzed according to all types of audit which were mentioned above.
Risks are identified and ways are being developed either to eliminate these risks or to minimize them.
Based on the information received, local regulations are being developed, which are mandatory for all employees of the company.
An employee or a division responsible for execution of compliance procedures is appointed in the company structure, and execution control is also introduced.
Based on the conducted audit, areas of future possible risks in the company's activities are also identified.
The procedure for conducting a sanctions audit depends on the scope of the companies' activities, but in any case it should include an analysis of the following areas:
Analysis of all clients and suppliers of the company for inclusion of the clients or their beneficiaries in the sanctions lists.
Analysis of all existing contracts (agreements) for inclusion of the goods, works and services that are the subjects of these contracts (agreements) in the sanctions lists.
Analysis of restrictions and their impact on the specified individuals, legal entities, works, goods and services.
Analysis of responsibility for non-compliance with sanctions restrictions.
Development of legal ways to solve the identified problems.
Such an analysis provides for a deep assessment of the companies' activities in relation to a wide range of sanctions restrictions. Sanctions restrictions are introduced literally every day, and information about them may be found in different sources, so the sanctions audit shall be carried out by external consultants with relevant experience.
The result of the sanctions audit should be systemic changes in the activities of the companies that will lead to the elimination or minimization of existing risks and, as a result, to the preservation of business.

Is your business facing a problem under sanctions?
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Maria Vladimirovna Dityatkovskaya
If you want to get a free consultation on business protection under sanctions, write to us and we will answer all your questions!

Ask for help from professionals and be confident in the quality of the services provided

If you want to get a free consultation on business protection under sanctions, write to us and we will answer all your questions!

Ask for help from professionals and be confident in the quality of the services provided

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