The increasing complexity of international financial sanctions regimes brings dangers to banks and their customers. The US, the UK and the EU have all used sanctions to try to tackle money laundering, corruption and terrorism. But these regimes throw up paradoxes that can catch financial institutions between conflicting obligations.
This presents a serious threat to banks that operate internationally. Institutions that have lent to Russian oligarchs targeted by the latest US sanctions (referred to as “specially designated nationals” or SDNs) may face a dilemma: expose themselves to risks of being in breach of the sanctions; or be sued by customers for failure to meet contractual duties.
