Russian sanctions and some practical steps for Guernsey and Jersey firms

Comsure expects both the Guernsey and Jersey governments and regulators will be looking to firms to conform to the substance of the sanctions implemented under the Regulations and act responsibly.

The GFSC has issued several Notices in respect of the rapidly developing situation, and last Friday (25 February) issued the following Notice (extract):

• Please be advised that,
• following Russia's invasion of the Ukraine, further sanctions measures are expected to be introduced in addition to the designations already made this week.
• In addition to new measures being introduced by the UK, all of which are automatically applied within the Bailiwick, amendments to previous listings have been and may continue to be issued.
• All businesses must be proactive in monitoring the emergence of new sanctions and the changes to previous designations.

The JFSC delivered a very similar message and the Government of Jersey on the webinar they delivered yesterday.

Remember a breach of the Sanctions Law may amount to an offence.

So as a starter for ten

1. Any Guernsey firm that has an account or any kind of relationship with a designated individual or entity under the Regulations (as per the Notice) should, immediately on discovery, report to the Policy & Resources Committee under the subject header "Russia Sanctions."
   • That the relationship exists and how it exists; and
   • That any funds, other assets or economic resources have been frozen;
2. In Jersey, reports of relevant accounts or breaches should be made using the Sanctions Compliance Reporting Form available both on the Sanctions section of the JFSC website and the Jersey Government Sanctions website.
   • Appropriate reports should also be made to the JFSC supervisory contact and
   • Consideration is given as to whether, in the circumstances, a suspicion is held that requires reporting to the Jersey Financial Crimes Unit.

In addition, the following is a quick guide of the proactive steps financial services businesses should now be taking to be best placed to manage sanctions exposure:

1. Establish or refresh your sanctions framework, including policy and procedures proportionate to its risk of sanctions exposure
2. Appoint a designated person, or team, to identify and monitor sanctions exposure, and report to the Board as frequently as necessary;
3. Have a clear and defined communications policy to ensure that all staff are made aware of any new sanctions or increased threats, such as cyber security;
4. Check that the service provider of sanctions screening technology is adopting new sanctions measures in real-time and that screening controls remain effective;
5. Ensure there is an effective escalation procedure in the event of a sanctions 'hit' and that it is well understood;
6. Establish a defined strategy for communication with the government and the regulator;
7. Ensure that staff are fully trained on sanctions risk and exposure and the penalty for breaches;
8. Review all relationships,
   • On a risk-based approach, to ensure ownership structures, including direct and indirect connections, are fully understood and where appropriate verified exposure;
   • Review of (E) CDD held on clients with geographical/sectoral / PEP exposure;
   • Remediate any gaps without delay.
9. Review operating terms and conditions to ensure sanctions, payment, and enforcement clauses are fit for purpose;
10. Understand and review the risk tolerances of your intermediaries and understand the sanctions regimes they are subject to.
    • Where there may be misalignment between the intermediary and the firm, consider whether you wish to continue to maintain the intermediary relationship;
11. Ensure a robust audit trail of actions and decision making;
12. Keep a close eye on regulatory and government websites and publications applicable to your jurisdiction to ensure you are fully informed of the quickly evolving sanctions landscape that affects you.