Events following the Russian invasion of Ukraine have fuelled a rapidly escalating crisis, bringing devastating impacts upon Ukraine's population, its economy, and its role in international trades, while also presenting serious ramifications for the global shipping, energy, and commodity trading markets
In the wake of the invasion, the US, UK, and the EU (followed by Canada, Japan, Switzerland, and several other countries) have imposed severe economic sanctions, with intent to asphyxiate Russia’s influence globally, largely by preventing transactions with an increasing number of designated entities and restricting the country’s access to reserves and liquidity. Such measures have major implications for Russia’s financial stability, as they are designed to decimate its economy.
Alongside the grave humanitarian impacts suffered by Ukraine, its economy has been decimated, while developments have given rise to significant implications for global grain supply. Disruption across wider global markets has transpired, upending trade predictions, and clouding the economic outlook. There are significant uncertainties around the stability of oil and gas supply, as well as the supply of other raw materials (such as ores and metals) and foodstuffs. Inflationary pressures are increasing due to actual or perceived wholesale commodity shortages, while oil prices reached a 13-year high earlier in March, and wholesale European gas prices are also rising sharply. These developments have the potential to bring about a downswing in demand for goods and services and, ultimately, a worldwide recession.
The short-term political reactions to the crisis will have to be accompanied by longer-term economic action, reflecting the inevitable reshaping of trade flows and supply chains, and moves to alleviate the worst effects of any shortages and supply disruptions which may persist.
Given the deep uncertainties caused by the immediate effects of the crisis, and those effects which, in the longer term, have the potential to reshape market fundamentals, the roles of all participants and Governments look set to change. In particular, adjustments to energy security will be crucial, to ensure adequate energy supply in industrial economies and the global economy. Already it appears that many prominent market constituents are seeking wider sources of oil, gas, coal, LNG, and other strategically important commodities. New infrastructure and trade-related assets, such as import terminals and storage capacity, are also under urgent consideration and review. Diversification and flexibility of supply allow trading risks to be spread, and against this backdrop, the relationships between the industrialised economies of Europe, the US and Asia, and energy commodity exporters in the US, Africa, Central America, and Australia, could deepen, while new relationships could be formed, and joint initiatives established.
To withstand any severe market shocks that may be driven by the crisis, and protect future commercial viability and prosperity, all operators in trading, shipping, and transportation, will have to act diligently and conscientiously, and maintain constant market surveillance.
Restrictions relating to prohibited activities
A key challenge regarding restrictions relating to people/entities lies in the need to identify if a counterparty is owned or controlled, directly or indirectly, by a designated entity/designated person, or by an entity of which majority interest is controlled by a designated entity/designated person.
What steps can be taken to minimise risk?
Identify the threats and potential impact
Maintain situational awareness
Communicate with all parties involved in a particular transaction
Obtain from a well-established external specialist source, reliable and insightful information on counterparties/those present within the contractual chain concerned
Checking sanctions lists for the name of an entity currently (or to be) dealt with is not enough. In order to mitigate the risk of breaching sanctions, appropriate steps must be taken to identify the person(s) ultimately controlling the entity(ies) concerned. This can require multi-layered searches in several different domiciles.
How can we help?
Infospectrum's reports incorporate UBO intelligence and include a sanctions search module
Infospectrum, the leading KYC, counterparty intelligence specialist in the maritime sector, leverages 20+ years of experience in navigating and reconciling the specific complexities of counterparty intelligence in the areas of ownership (including actual and perceived ultimate beneficial ownership) and significant control. Our global team of around 50 Analysts is well-placed to conduct focused research and reporting on ultimate beneficial ownership upon request.
Sirius Sanctions Search Platform
In addition to providing in-depth KYC and UBO intelligence, Infospectrum offers access to its proprietary Sirius sanctions search resource, to facilitate the process of screening known individuals/vessels/entities against 8 key sanctions lists.
In response to the wave of new sanctions imposed upon Russian entities and persons, we have updated our internal systems to check for updates to these key sanctions lists every hour, so that searches can be performed against the very latest data. Sirius draws data from:
- UK - Financial sanctions targets: list of all asset-freeze targets
- UN - United Nations Security Council Consolidated List
- EU - Consolidated Sanctions List
- US - Consolidated Sanctions List
- US - Specially Designated Nationals And Blocked Persons List (SDN)
- Switzerland - Consolidated Sanctions List
- Australia - Consolidated Sanctions List
- Canada - Consolidated Canadian Autonomous Sanctions List
Sirius also allows users to download a time and date-stamped PDF record of their searches, to support compliance and audit trail requirements.
If you would like more information on any of the above matters, wish to request a demonstration of Sirius, or would like to add this resource to your existing Infospectrum Portal account, please complete the form below: