Across the globe, governments including the 27 member states of the European Union, Switzerland, and the United States of America are taking decisive action by issuing stringent sanctions against Russia, following its military invasion of the Ukraine.
To assist its clients with their imminent needs, BDO has set up a global response team supporting businesses by responding to their questions in an appropriate and timely manner.
Sanctions Overview
The introduced sanctions cover a wide range of industries and impact businesses globally.
Impacted areas of Ukrain conflict sanctions
For the latest sanctions updates, we recommend visiting the websites of the international sanctions authorities listed below:
- European Union (EUR-Lex)
- Swiss State Secretariat for Economic Affairs (SECO)
- U.S. Department of Treasury - Office of Foreign Assets Control
- U.S. Department of Commerce - Bureau of Industry and Security
Am I affected?
To establish the potential impact on your business, BDO’s global response team has prepared a set of key questions (checklist) your organization must consider in the light of current developments.
$(function() { var icons = { header: "ui-icon-plus", activeHeader: "ui-icon-minus" }; $("#dropdown").accordion({ icons: icons, header: "h6", collapsible: true, active: false, heightStyle: "content"}) });The current situation and the further evolution of sanctions are highly dynamic and provide a challenge to many international organizations.
How we can help
BDO can assist you with comprehensive support in the form of expert advice as well as the required resources.
Enterprises must continuously monitor their operations to gauge the business impact of the evolving sanctions on a global scale, to avoid non-compliance with the direct or indirect sanctions and with it severe regulatory and reputational consequences.
Sanctions Checklist
- Do you operate in Russia, Belarus or Ukraine?
- Do you conduct any activities with any Government of Russia, Belarus or Ukraine?
- Is Russia, Belarus or Ukraine Russia or Ukraine integral to your supply chain?
- Do you know all of the end users of your services/products and where they are located?
- Do you receive or conduct any payments from or to Russia, Belarus or Ukraine?
- Do you facilitate movement of funds / goods / services to Russia, Belarus or Ukraine?
- Do you produce, import, export or deal in any goods or technologies that are subject to sanctions or Export Administration Regulations?
- Do you produce, import, export or deal in any goods or technologies that are considered dual-use?
- Do you operate or plan to operate in the precious metals, petrochemical, airports, insurance, travel agents, aircraft, petroleum, oil or gas industries or the military or defence sectors?
- Do you know the beneficial owners of the companies with whom you do business?
Due Diligence Expertise
Globally, BDO has conducted enhanced Due Diligence Reviews in more than 160 countries and can assist you in the assessment of your business exposure to the current sanctions.
- Negative News Review
Review of available news content to uncover adverse or unfavorable reports relating to a business entity or a specific person.
- Beneficial Ownership Information
Identify and verify a company’s ultimate beneficial owner (if available) and complex company structures using the Russian corporate registry, data from other public records and global business intelligence tools.
- Sanctions/Watchlists
Review of sanctions, regulatory actions, and law enforcement watchlists, such as the UN Security Council’s consolidated lists, EU lists, OFAC, BIS, FinCEN, SECO, HM Treasury lists, etc.
- Political Exposure
Review of lists of individuals and entities to identify their association with governments and other senior positions.
- Source of Wealth
Verifizierung von Dokumenten und Erklärungen über die Herkunft von Vermögenswerten und der Einhaltung von steuerrechtlichen Pflichten.
- Legal Records
Review of case law and legal journals to help check litigation history across various U.S. Federal and State Court Cases, UK Cases, International Court of Justice, etc.
Core Competences
BDO’s global teams work with multinational industrial and manufacturing companies and financial services providers in the following areas relevant to sanctions compliance:
- Identify Sanctions Exposure
BDO can help identify where the sanctions risks exist in your organization. Is Russia or Ukraine integral to your supply chain? Do you procure or sell technology subject to various export regulations? Do you know the beneficial owners of the companies with whom you do business? Do you manufacture products that exceed the de minimis for US origin content? Do you purchase products from restricted blacklisted entities?
There are a myriad of sanctions imposed by several nations that companies must now navigate when doing business internationally.
- Export and Sanctions Compliance Audits
We have conducted numerous risk-based trade compliance audits and helped companies identify potential risk areas and develop practical, sustainable internal controls to address those risks. We understand the importance of a risk-based approach and right-sizing a compliance program.
- Regulatory Guidelines and Technical Regulatory Expertise
We understand the regulator’s expectations, know where unidentified, significant risks may exist and are well-versed in the elements of an effective compliance program. Our experience allows us to generate reasonable recommendations for remediation as needed. We can evaluate compliance programs to identify gaps with e.g. BIS and OFAC guidelines.
We have detailed technical regulatory expertise, for example in determining export classifications (ECCNs), conducting de minimis analyses for foreign products, and interpreting complex OFAC regulations, while also bringing in supply chain and logistics experts and a former in-house perspective.
- Periodic Screening and Monitoring
We have experience with systems used for name, geography, and item screening, and have experience implementing compliance enhancements through IT systems, including ERP systems. KYC (“Know Your Customer”) does not only apply to financial institutions. Companies operating in a multitude of industries and sectors must also know and screen the parties with whom they do business to ensure they do not engage with a blacklisted party.
- International Supply Chain Experience
BDO has experience working with large multinational companies and evaluating all aspects of the supply chain from procurement, to contract manufacturing, to logistics, warehousing, and delivery. BDO understands the complexities of a global supply chain operating in numerous continents and jurisdictions.
- Trade Compliance Risk Assessment
The Bureau of Industry and Security (BIS) Guidelines provide details on the eight elements that BIS has determined are critical for an effective Export Compliance Program (ECP) for goods, software, and technology subject to the Export Administration Regulations. BDO can assess an entity’s export compliance program against the BIS Eight Elements of an Effective Export Compliance Program, identify areas with weak internal controls and recommend practical remediation. Our assessments are tailored to the risk profile of our clients, and we will take into consideration the size of the organization, the strategic nature of items and possible end-uses, end-users and end-destinations, subsidiaries, customers, relationships with business partners, volume of imports/exports and complexity of import/export processes. We develop a tailored risk assessment strategy and gather information/data to identify the organization’s risk areas (e.g., use of international resellers and intermediaries, sales into higher-risk markets, product lines classified above EAR99, online services, lack of KYC).
- Design and Implementation of a Sanctions Compliance Program
Organizations can employ a risk-based approach to sanctions compliance by developing, implementing, and routinely updating a Sanctions Compliance Program (SCP) for their enterprise. An effective or "risk-based" SCP will be tailored to an organization’s size, products and services, customers and counterparties, geographic locations, and modalities of business, while also incorporating and addressing core areas defined in the OFAC Sanctions Compliance Program Framework and the EU Guidance on internal Compliance Programs such as i) management commitment, ii) risk assessment, iii) transaction screening and internal controls, iv) testing, auditing and corrective action and v) training. BDO is available to assist organizations in the development, enhancement, or independent assessment of an SCP. Having a risk-based and high preforming SCP is critical in the prevention of sanctions violations and proving adequate diligence in circumstances where violations may arise.
- Internal Control Assessment
BDO can review and test the organization’s existing compliance program, policies, procedures, and related controls (collectively “internal controls”) to understand the requirements the company currently has in place, how identified risks are being addressed, and any potential gaps. BDO’s internal control assessment looks at the detailed trade compliance activities and processes that occur in business cycles, such as sales and distribution, manufacturing, R&D, logistics, returns and repairs, etc. We have a proven, successful methodology that integrates entity level, business process, and IT controls for a seamless, comprehensive approach in assessing a company’s internal control environment.
- Sanctions Compliance Program Remediation
We have experience developing and implementing right-sized, effective, and sustainable corrective actions to address gaps and vulnerabilities in compliance programs, and preparing voluntary self-disclosures to regulators when appropriate, frequently resulting in closure without further action by the agencies. We can help organizations prioritize corrective actions based the severity of risk of non-compliance.
- Data Analytics
BDO can analyze large volumes of data and transactions to identify trends and red flags.
Additional Resources