‘Island can do its bit to help influence events in Ukraine’
Applying financial sanctions against Russian individuals and businesses is the most effective way for Guernsey to influence events in Ukraine.
That is the view of Guernsey advocate and Mourant partner Abel Lyall, who has advised local financial institutions to be vigilant and suspicious in complying with international sanctions.
Since Vladimir Putin ordered troops into Ukraine on Thursday, governments around the world have announced sanctions against Russia.
The States of Guernsey follows the UK’s international sanctions regime and therefore instructed the local finance industry to freeze the assets of five Russian banks and three billionaires which the UK named.
It is unclear whether they have any presence in the island, but there are a number of local financial services companies with strong links to Russia.
‘For such sanctions to achieve their aims, it is important that all like-minded countries are aligned and act as part of a broad coalition of international partners,’ Mr Lyall said.
‘Given the role and size of the financial services industry in Guernsey, it is in the area of financial sanctions that we can make the biggest contribution.’
READ MORE ON THE LOCAL RESPONSE TO UKRAINE
Mr Lyall said the increasing number of sanctions being enforced represented an increased risk to the companies expected to comply. 'It pays to be hyper-aware of what will fall under the law,’ he said.
‘The report needs to be made when it is known or suspected that an individual or entity is a sanctioned person or is linked to a sanctioned person.
‘This is regardless of whether any activity that would be a breach of sanctions has been undertaken or is contemplated.
‘Reporting obligations are also not limited to persons or entities that are clients of a relevant institution.’
He warned that all trustees and financial institutions should have effective screening to spot ‘hits’ and that processes should be routinely tested.
‘Any breach of the provisions of the Sanctions Law, even inadvertently, can be stark, with criminal liability attaching to most offences,’ he said.
Given the use of complex structures locally, it can be difficult to ascertain what assets within a structure would fall under the sanctions regime and what should be done with them.
He further warned that sanctions compliance would be likely to become more complex, as their use increases.
