The latest collaboration between Reporter.London and the financial crime newswire AMLIntelligence, published on February 13, shows how sanctions on Russia and Belarus are often failing in practice, because of contradictory interpretations of the rules and the guidance, which are allowed to stand by governments who fear legal reprisals.
This has led to the Kafkian result of different banks treating the same company differently for the purpose of sanctions, while EU jurisdictions are similarly divergent in their interpretation of sanctions regulation handed down from Brussels.
In London, consulting firms, lawyers and banks are caught between threats – civil and criminal – on the one hand from the state for inadvertently helping clients violate sanctions, and on the other hand from prospective clients who have been turned away solely on the basis of nationality, with several lawsuits brought on both types of issues.
Leading experts speaking to Reporter and AMLi have taken issue with the government’s reluctance to make a clear decision on key aspects of the law, demanding that companies make up their own minds – after years of policymakers urging the City of London to gorge on ex-Soviet cash.
For its part, the Treasury admits that the sanctions regime needs work, with officials saying discussions are ongoing on further tweaks of guidance and methodology.
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