How is the 5th package of sanctions to Belarus influencing financial institutions' work?
The situation in Belarus is escalating; the 5th package of sanctions was implemented on the Lukashenko regime in Belarus for its human rights abuses and the instrumentalisation of migrants when transiting them to the borders of Poland and previously on the Lithuanian border.
17 high-ranking political officials and 11 companies (Belarussian national air company Belavia, hotels, tour operators) were added to the sanctions list. At the same time, the USA is threatening with additional major sanctions on Putin's regime in Russia, should they escalate military activity in the border of Ukraine.
There are a lot of good tools and technologies to detect and prevent direct transactions with sanctioned persons. Therefore, it is expected that newly sanctioned persons and entities will try to circumvent the sanctions by establishing new transaction schemes via third countries and creating new shell companies for that.
It means that especially banks, payment institutions, and other obliged entities must be ever more vigilant that their sanctions violation prevention controls and processes are strong enough to prevent not only the direct transactions with sanctioned persons but also other suspicious transaction schemes with major probability of circumventing the sanctions. Moreover, even if a transaction does not directly include a sanctioned counterparty, the regulators expect that in some cases, a financial institution implementing proper due diligence measures just should have known that sanctioned counterparties are indirectly involved. If you'd like to dive deeper into the topic of sanctions, KYC or compliance in general, contact us for online and/or classroom training.