NAFCU examines U.S. imposed sanctions against Russia
In the latest insight post on NAFCU’s Compliance, Risk, & BSA Network, NAFCU Senior Regulatory Affairs Counsel Kaley Schafer reviews how the imposed sanctions against Russia will impact credit unions. Russia early Thursday morning launched an attack on Ukraine’s borders in an effort to undermine its territorial integrity. In response to the invasion, President Joe Biden signed an Executive Order (EO) imposing sanctions against Russia, blocking property of certain persons and prohibiting certain transactions with respect to the attacks.
Schafer notes that while the majority of the imposed sanctions will not impact credit unions, there are sanctions that directly impact Office of Foreign Assets Control (OFAC) compliance, which credit unions, as financial institutions, are familiar with.
Following Biden’s EO, OFAC added certain individuals and entities to the Specially Designated Nationals (SDN), to include major Russian banks and their subsidiaries, as well as Russian political figures and families with close ties to Russian President Vladmir Putin. “Transaction monitoring systems typically receive updated SDN list information, but credit unions should ensure that they are abiding by OFAC regulations and properly blocking property and prohibiting transactions as required,” wrote Schafer.
Of note, the EO also blocks all property and interests in property that are in the U.S. by any person operating in “covered regions.” OFAC issued several directives including one that prohibits any U.S. financial institution from participating in certain actions with the Central Bank of Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance Russian Federation.
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