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Russian sanctions land like a bomb in corporate suites
Within minutes of the announcement of U.S. sanctions against Russia in March, there was a surge in traffic on the website of Treasury’s Office of Foreign Assets Control, which sends out a blacklist of targets. Top banks, financial firms and companies around the world quickly flooded Treasury’s 1-800 hotline with urgent questions about how to apply the sanctions to individuals and companies on the list.
Visitors to OFAC’s website shot up to more than 7,000 a second from the usual 100 to 200 a second, according to Treasury, and social media was ablaze.
The reason for all this consternation: Treasury’s power to issue sanctions and enforce them is non-negotiable. But Wall Street isn’t yet sure what to make of the government’s blacklist, let alone how to apply it. In fact, a number of lawyers and executives from big banks and multinationals privately told Newsweek that their confusion over how to apply the sanctions is only exceeded by their fear of violating them—and being slammed with multimillion-dollar penalties. In recent years, fines at Treasury have been so steep, the Office of Terrorism and Financial Intelligence has been a net revenue generator—a rarity in U.S. government—bringing in more than a billion dollars in 2012 alone from settlements with banks like Standard Chartered and HSBC.
“The Treasury has deputized the entire U.S. financial system to help it achieve foreign-policy goals,” said John Reynolds, a partner at law firm Davis, Polk & Wardwell in Washington, who is advising a number of companies, including major banks and financial firms, about how to apply the Russia-Ukraine sanctions. “It’s a new frontier.”
Visitors to OFAC’s website shot up to more than 7,000 a second from the usual 100 to 200 a second, according to Treasury, and social media was ablaze.
The reason for all this consternation: Treasury’s power to issue sanctions and enforce them is non-negotiable. But Wall Street isn’t yet sure what to make of the government’s blacklist, let alone how to apply it. In fact, a number of lawyers and executives from big banks and multinationals privately told Newsweek that their confusion over how to apply the sanctions is only exceeded by their fear of violating them—and being slammed with multimillion-dollar penalties. In recent years, fines at Treasury have been so steep, the Office of Terrorism and Financial Intelligence has been a net revenue generator—a rarity in U.S. government—bringing in more than a billion dollars in 2012 alone from settlements with banks like Standard Chartered and HSBC.
“The Treasury has deputized the entire U.S. financial system to help it achieve foreign-policy goals,” said John Reynolds, a partner at law firm Davis, Polk & Wardwell in Washington, who is advising a number of companies, including major banks and financial firms, about how to apply the Russia-Ukraine sanctions. “It’s a new frontier.”
MORE HERE: http://wonkynewsnerd.com/sanctions-land-like-bomb-corporate-suites/
5 replies
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= new reply since forum marked as read
Frightening. 
make it easier to prosecute them after they are caught deliberately undermining policy?
Just a thought.
