Crimea-related Sanctions For non-US Persons.

𝐴𝑙𝑙 π‘π‘’π‘Ÿπ‘ π‘œπ‘›π‘ , 𝑖𝑛𝑐𝑙𝑒𝑑𝑖𝑛𝑔 π‘›π‘œπ‘›-π‘ˆ.𝑆. π‘π‘’π‘Ÿπ‘ π‘œπ‘›π‘ , π‘’π‘›π‘”π‘Žπ‘”π‘’π‘‘ 𝑖𝑛 π‘–π‘›π‘‘π‘’π‘Ÿπ‘›π‘Žπ‘‘π‘–π‘œπ‘›π‘Žπ‘™ π‘‘π‘Ÿπ‘Žπ‘‘π‘’ π‘Žπ‘›π‘‘ π‘π‘œπ‘šπ‘šπ‘’π‘Ÿπ‘π‘’ π‘ β„Žπ‘œπ‘’π‘™π‘‘ 𝑏𝑒 π‘Žπ‘€π‘Žπ‘Ÿπ‘’ π‘œπ‘“ π‘ π‘Žπ‘›π‘π‘‘π‘–π‘œπ‘›π‘  π‘π‘Ÿπ‘œβ„Žπ‘–π‘π‘–π‘‘π‘–π‘œπ‘›π‘  π‘Žπ‘π‘π‘™π‘–π‘π‘Žπ‘π‘™π‘’ π‘‘π‘œ π‘›π‘œπ‘› π‘ˆ.𝑆. π‘π‘’π‘Ÿπ‘ π‘œπ‘›π‘  π‘€β„Žπ‘œ π‘–π‘›π‘£π‘œπ‘™π‘£π‘’ π‘ˆ.𝑆. π‘π‘’π‘Ÿπ‘ π‘œπ‘›π‘  𝑖𝑛 π‘ π‘’π‘β„Ž π‘‘π‘Ÿπ‘Žπ‘›π‘ π‘Žπ‘π‘‘π‘–π‘œπ‘›π‘ .

What are the four primary prohibitions for the Crimea region?

  • New investment in the Crimea region of Ukraine by a US person, wherever located
  • Importation into the US, directly or indirectly, of any goods, services, or technology from the Crimea region of Ukraine
  • Exportation, re-exportation, sale, or supply, directly or indirectly, from the US, or by a US person, wherever located, of any goods, services, or technology to Crimea
  • Approval, financing, facilitation, or guarantee by a US person, wherever located, of a transaction by a foreign person where the transaction by that foreign person would be prohibited by this section if performed by a US person or within the United States.

Can a non-US financial institution process a US Dollar payment for shipping services in Crimea?
No. This involves the non-US FI to a service rendered in Crimea and involves indirectly a US correspondent bank in the transaction.

Can a non-US financial institution open a US Dollar account for a person in Crimea?
No. Opening an account for a person in Crimea in US Dollars, exposes the financial institution to US sanctions!

Can a non-US company maintaining a US Dollar account in Crimea move funds to another US Dollar account in Europe under the same beneficial owner?
A non-US company maintains a US Dollar business account with a bank located in Crimea to handle local transactions. In this situation, when moving funds, the non-US company is in receipt (or importing) a Crimea-origin financial service from the Crimean bank. The very act of maintaining a US Dollar account is prohibited as an importation of a Crimea-origin service.

Can a non-US person re-export US goods or goods incorporating partially US technology in Crimea?
No. The prohibition makes clear that both the direct and indirect exportation, re-exportation, sale, and supply of United States origin goods, services, or technology is also prohibited. Although not directly, the non-US person is exposed to the US sanctions.

Can non-US Visa or MasterCard provide payment services in US Dollars to merchants in Crimea?
No. Visa and MasterCard can no longer provide payment services in US Dollars to merchants in Crimea.

Can non-US person pay a commission to a US person for a Crimea customer referral?
No. This is a facilitation case. A US person cannot earn a commission for referring a Crimean customer to a foreign exporter. This is considered as an indirect interaction with the United States.

Can non-US person pay an invoice in US Dollars for services rendered in a port in Crimea?
No. Using the US financial system for paying services rendered in Crimea, exposes the FI to the US sanctions.

Sanctions. Foundations.

An ArrowLink Professional Course
Compliance is a construction of laws, regulations, interpretive notes and guidelines that may seem to be established to create complexity, endless reporting and obstacles to business. Looking more in depth, we see that Sanctions is a foreign policy weapon against other countries or individuals, making sanctions very meaningful.Β 

In this Foundations Course, you will be able to discover the History of Sanctions and how we arrived to where we are today, the Purpose of Sanctions, with a detailed explanation of all sanctions regimes, Who Imposes Sanctions, governments or international organizations, Who Is Subject to Sanctions, Sanctions Types, Considerations of Non-Compliance, incorporating Sanctions Compliance to Organizations.

Learn More..

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Strong/Weak a.k.a. Alias. A Risk Based Approach

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A “strong” and “weak” a.k.a (also known as) are generic aliases that may generate a large volume of false hits in sanctions screening systems, but before eliminating all a.k.a. hitsΒ  you should apply and document a risk based approach!

Our experience in projects with fined FIs shows that regulators will NOT accept a simple elimination of hits on a.k.a. (strong or weak) and will prefer a risk-based approach based on SCORING MATCH%.

E.g. A weak a.k.a. may be a high potential match if the Scoring Match >= 85%

Here is an example of such a match that may jeopardize your sanctions risk policy

  1. Go to the OFAC Search Tool and do a generic search for the individual: abou kharim and select 75% as Minimum Name Score.
  2. Press Search to run the query.
  3. At the results screen, notice the entry “ABOU HAMZA” with a score of 90%
  4. Click on the Name link to open the OFAC Sanctions entry


  5. The name matches with a score of 90% to the weak a.k.a. (the individual’s name is completely different!)

Would you take the risk to eliminate these matches without investigation?

It is highly recommended to stay at the safe side and include the Minimum Matching Score (e.g. 80-85% or higher), based exclusively on OFAC’s rating (not a private db or system) in your Sanctions risk policy and configure your matching tools accordingly.

Differences Beween AML and Sanctions Investigations

Multiple financial institutions, use a single team for conducting both AML and Sanctions investigations. Even though the concentration of all financial crime investigations under a single team seems evident, the two investigations present some specific characteristics:

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  • AML investigations operate usually on past transactions. Sanctions investigations operate essentially on inter-banking messages.
  • AML investigations do not affect transactions. Sanctions investigations may stop an incoming/outgoing transaction before it becomes effective.
  • AML investigations are subject essentially to country regulators rules. Sanctions investigations will operate on international regulators and international sanctions.
  • AML investigations do not interfere with internal operations. Sanctions investigations may interfere directly with internal operations by delaying transactions.
  • AML investigations focus on unusual and suspicious transactions. Sanctions investigations focus on sanctioned countries and individuals or entities.
  • AML investigations may tolerate an unusual transaction. Sanctions investigations should be a zero-tolerance area.
  • AML investigations operate only on a segment of the FI’s transactions. Sanctions filtering scans all incoming/outgoing inter-banking messages without exception.
  • AML investigations may not focus on the transaction currency. Sanctions investigations focus on specific regulator depending on transaction currency.
  • AML investigations do not validate transactions with sanctioned countries. Sanctions investigations require a special license for transactions with sanctioned countries.
  • AML and Sanctions investigations may follow a different process flow.
  • AML investigations rationale, justification and documentation are different from Sanctions.

If Everyone Does It Wrong.. Why Change?

During the summer months of 2019, I had been assigned an IT migration project for all Compliance modules for a large trade office. In my big surprise, I realized that even if the local regulator cites clearly that..
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The person responsible for the monitoring is forbidden from controlling any business relationships for which he/she is directly responsible for the business.Β  Β 
(Ch 7, Art 25, Β§3)

Β All major software editors in transaction monitoring modules..

They first send the suspicious cases to the Front Office (responsible for the business) and then to the Compliance Officer!

The majority of the suspicious transactions retrieved by the system, have been marked as ‘irrelevant’ by the Front Office, classified and never sent to Compliance. The company apparently had found an original way, with the help of the software editor, to reduce the Compliance work load!

Do not try to reveal such a breach! They will proudly say that..

Everybody does that and the auditors approve it.. Why change?

In 2020, the company was under the regulator’s radar for trade fraud transactions..