Crimea: Sanctions Risk Considerations

CAMSTOLL ADVISORY

 

On December 22, 2015, the US Treasury Department designated three Russian banks and one Crimea-based bank for operating in Crimea. The three designated Russian banks are Genbank, Krasnodar Regional Investment Bank, and Bank Verkhnevolzhsky. The Crimea-based bank is Sevastopolsky Morskoy Bank.

In addition to these four banks, seventeen other Russian financial institutions and one additional Crimea-based institution operate on the territory of Crimea. Among these banks, two were previously designated by the US Treasury Department:  Bank Rossiya and Russian National Commercial Bank.

In announcing the designations, the US Treasury Department stated that targeting these entities for operating in the Crimea region of Ukraine underscores the US commitment to opposing Russia’s occupation of Crimea.

Many of the remaining unsanctioned financial institutions operating in Crimea likely engage in banking activity with other Russian banks and financial institutions in the region.

Financial institutions, depending on risk profile, should consider surveying correspondent banking activity to identify and assess possible exposure to banks operating in Crimea. The use of industry tools that provide single point of access to correspondent banking transactional data can be an effective and efficient tool to assist in:

  • improving visibility on the methods used to obfuscate Crimea-related transactions, in line with past OFAC guidance;
  • identifying downstream Crimea-related correspondent banking exposure; and
  • identifying respondents that are intermediating for banks operating in Crimea.

The Camstoll Group is a leading advisory firm focused on addressing illicit finance and economic sanctions-related challenges. Our services include risk-based enhanced foreign correspondent account monitoring, including through the deployment of SWIFT Compliance Analytics. With decades of combined experience assessing underlying threats and vulnerabilities, we identify sanctions-related or heightened risk banks, corridors, and transactions.

Contact Howard Mendelsohn at mendelsohnh@camstoll.com
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