Russia sanctions: initial steps to mitigate risks

Severe international sanctions are being imposed on Russia following the invasion of Ukraine. The sanctions regimes are constantly changing, as new rounds of sanctions are being introduced in quick succession. There are also certain variations across the key regimes (including the US, EU, and UK).


Severe international sanctions are being imposed on Russia following the invasion of Ukraine. The sanctions regimes are constantly changing, as new rounds of sanctions are being introduced in quick succession. There are also certain variations across the key regimes (including the US, EU, and UK).


Ukraine and Russia conflict. Country flags on chess pawns on a chess board. 3D illustration.

Severe international sanctions are being imposed on Russia following the invasion of Ukraine. The sanctions regimes are constantly changing, as new rounds of sanctions are being introduced in quick succession. There are also certain variations across the key regimes (including the US, EU, and UK).

Norwegian authorities have stated that they support the EU sanctions, and that they are now working on implementing these in Norwegian law.

In order to ensure compliance with the various regimes and mitigate the risks for your company, the following initial steps should be taken:

  1. Ensure that you have a robust and appropriate due diligence process that is capable of mapping ownership and control structures and catching any potential sanctioned entities and individuals, especially with regards to the acceptance of new businesses.
  2. Map any relationships with Russian (or Belarusian) customers, suppliers, or other partners. Ensure that you have a complete picture of the direct and indirect ownership and management of the legal entities.
  3. For all customers, suppliers or other partners located outside Russia (or Belarus), suspicion of indirect control by Russian entities or persons should be investigated. Particular caution is needed in case of holding companies in jurisdictions with limited transparency regarding ownership.
  4. Consider whether your branches, subsidiaries and/or agents, if located in different countries, may be covered by different sanctions regimes. Any overlapping sanctions regimes should be considered carefully in order to mitigate risk and ensure compliance.
  5. Verify that none of the products sold by your businesses are covered by export control rules or trade restrictions.
  6. Consider whether a sanctions clause should be included in your standard terms or contracts. Performance of the contract must be suspended if sanctions apply, and your partner should be obliged to inform you should it be made subject to any new sanctions.
  7. Consider whether any business development plans for the near future should be halted if they entail any Russian or Belarusian exposure.

If the mapping of customers, suppliers and other partners brings up any Russian (or Belarusian) owned or controlled entities, a more detailed risk assessment is needed for each of these entities. Both risks related to compliance with the sanctions and contractual risks should be addressed.

Confirming that the entity and its owners are currently on a sanctioned entities list is only a first step of the risk assessment. These lists are subject to change and may be updated at any time. Other sanctions may also be applicable.

In addition, even if the trade relationship with a Russian (or Belarusian) partner is currently not covered by any sanctions, financial transactions to and from the partner may be prevented or made very difficult as a result of sanctions against Russian (or Belarusian) financial institutions.

Compliance with the sanctions regimes should not be taken lightly as any violations may have both civil and criminal consequences depending on domestic laws, e.g., imprisonment and the imposition of significant fines.

Finally, it is important to start planning ahead. While the sanctions apply right now, the war may lead to other serious consequences down the road, including the disruption of supply chains and significant price changes. In order to mitigate the risk to your company, it is recommended to discuss future supply with your key suppliers, and be prepared for the possibility that you may have to rely on alternative sources. Additionally, significant price increases might affect several aspects of your businesses, including supplies, energy, and transport.

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