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Mandated Systems for Sanction Circumvention?

Looking Ahead at the draft EU 14th Sanctions Package


As the European Union evaluates a proposal for a 14th package of sanctions against Russia, core additions aim to restrict Russian liquefied natural gas (LNG) sales and the use of EU ports by vessels involved in Russia's war efforts, in addition to some interesting proposed expansions in lability for EU companies for non-EU operating entities under their control.


According to Reuters, the draft proposals seek to prevent transshipment of Russian LNG to third countries using EU facilities and a ban vessels contributing to Russia's military actions from EU ports. In terms of transportation, the EU aims to tighten restrictions on flights and road transport involving Russian-owned or controlled aircraft and trucks, along with imposing a transaction ban on using Russia's financial messaging systems outside the country.


The proposals also include banning political parties, think tanks or media in the EU receiving economic benefits from Russia, including specifically listing Voice of Europe, RIA Novosti, Izvestija and Rossiiskaja Gazeta as sanctioned media.


However, one of the most interesting developments is the expansion of liability for EU operators. Based on the current drafting EU Operators would also be held accountable if non-EU entities they own or control circumvent the sanctions.


The proposal go further to suggest that for sensitive goods that are used on the battlefield or are critical to Russia's military, operators would be required to implement or have due diligence and monitoring systems to identify and mitigate risks of circumvention to Russia.


To address these evolving regulatory challenges, companies like SEIA, specializing in data analytics for export controls and sanctions risk management can play a crucial role in meeting these proposed requirements. By leveraging advanced analytics we can identify red flags for circumvention, such as suspicious trade patterns, in real time. Moreover, these companies can use these insights as a foundation for circumvention and sanctions risk assessment, to support actionable root cause analysis to pinpoint vulnerabilities in the trade compliance processes, and enable targeted risk-based mitigation strategies.


As regulatory risks continue to expand in scope and requirements, our approach to how we engage in risk management also must evolve. Our mission is to empower trade compliance departments to proactively manage compliance risk exposure, and through timely insights and actionable intelligence, make meaningful compliance achieveable and good for business.


To learn more about how our solutions can support your company in addressing these topics please reach out to us at contact@seiatech.com or by booking an introductory call through the form above.

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