SITUATION
The international response to Russia’s invasion of Ukraine has created a new world sanctions order.  These sanctions are aimed at denying Russian access to capital and technology, but they will also have a significant, immediate and direct impact on companies and organisations around the world.

Enforcement: Law enforcement agencies have been clear that sanctions will be policed robustly and that suspected breaches will be rigorously investigated and – if the necessary evidence exists – prosecuted.

Consequences: Companies and directors could face severe legal consequences if they are found to have breached a sanction.  Such a finding would also have adverse reputational consequences for the company, as would a finding that a company has failed to adhere to the spirit of any sanctions regime imposed.

Risk assessment: As part of their sanctions management program, which is a process that should form an integral part of their compliance programs, companies must not only consider their own compliance, but also that of their trading partners, supply chains, subcontractors, agents, financers, insurers, professional advisors, etc., no matter where they are located in the world.

RECOMMENDATION
To ensure they have taken proportionate and relevant measures to avoid risk and to provide a possible defence in the event of an investigation and prosecution, companies are strongly advised to take immediate action, including:

• Create, implement and maintain a Sanctions Management Strategy (Board level)
• Review and amend existing Integrity Compliance Programs and associated documentation
• Introduce, implement and regularly review a Sanctions Compliance Program
• Appoint a dedicated Sanctions Compliance Officer
• Provide Sanctions Management training
• Review their PR and Media Strategy plans
• Undertake a thorough review of current and proposed contracts and relationships (suppliers, agents, subcontractors, etc.)
• Review sanctions insurance cover (LMA 3100 – Sanctions Limitation & Exclusion Clause)

SOLUTION
Pavocat provides the full spectrum of expert compliance outsourcing, reputation management and training services to help companies that do not have this capability and capacity in-house or whose in-house capacity needs specialist support to enhance their existing structures.

Pavocat’s professional support ensures that a Company can (1) continue to trade safely and securely; and (2) demonstrate their compliance with applicable sanctions and their integrity more generally, if they are subject to scrutiny by law enforcement and/or the media.

To discuss these issues directly, please contact one of Pavocat’s directors: Lee Marler, James Stuart or James Johnstone on 020 3776 7887 or office@pavocat.com, or use the link below.