- UN sanctions. All UN members are obliged to accept and carry out Resolutions passed by UN Security Council.
- EU sanctions. Sanctions are implemented through EU Council Regulations and have direct effect in all EU member states.
- Swedbank also implements relevant U.S. Financial Sanctions based on the Swedbank Group Policy on Financial Sanctions.S. Financial Sanctions are imposed by U.S. President Executive Orders and implemented by the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury.
By following U.S. Financial Sanctions, Swedbank is being able to keep and maintain relations with banks in U.S. jurisdiction and provide to its customers transactions and other products/services in USD currency or transactions related to U.S. persons.
Swedbank implements above mentioned International Sanctions to the extent determined by the UN, the EU, the U.S. or state bodies (i.e. Government) and according to the Swedbank Group Policy on Financial Sanctions. Additionally, Swedbank considers correspondent banks requirements, as well as its own risk appetite. Therefore, Swedbank will not engage in any actions that directly or indirectly evade the Financial Sanctions prohibitions, correspondent banks requirements and Swedbank’s internal decisions.
Below are provided major types of International Sanctions implemented within Swedbank:
In case of imposed above mentioned sanctions Swedbank will reject transaction or will not provide any related products/services.
Swedbank will not provide any financial services restricted (e.g. loans, credits, dealings in financial instruments), as well as will not participate in any transactions related to prohibited activities (e.g. restrictions on provision, exportation, or reexportation of goods/services or technology in support of exploration or production for deepwater, Arctic offshore, or shale projects that have the potential to produce oil).
- Comprehensive sanctions against defined countries/regions.g. North Korea is comprehensively sanctioned by the UN, the EU and the U.S.
It is important to mention that the asset freeze and some sectoral restrictions are also applicable to legal entities that are owned or controlled, directly or indirectly, by a designated person. Although those legal entities may not be designated and included into sanctions lists, the same sanctions are applicable for them and needed to be implemented by Swedbank.
EU imposed International Sanctions (including implemented UN sanctions) apply within the territory of EU and to all EU persons inside or outside the territory of EU. Thus, both financial institutions and their customers are legally responsible for complying with the EU sanctions and have the obligation to inform the competent authorities on the cases they know or suspect transactions with sanctioned subjects. Swedbank will always inform the competent authorities in case of breach of the EU Sanctions and freezing of funds. Examples when reporting is necessary:
- The customer identifies that its partner or customer is the EU sanctioned person;
- The customer identifies that beneficial owner of the legal entity which buys goods/services is the EU sanctioned person;
As a low risk bank, Swedbank expects that its customers are aware of their business exposure towards International Sanctions, in order to avoid measures which could negatively affect their activities.
When the business activities extend to foreign countries, Swedbank advises its customers to assess potential risks related to International Sanctions before involving themselves in business relationships or transactions. Even if no embargoes or restrictions are imposed against a particular country, Swedbank recommends to evaluate if goods/services could be made available to or for the benefit of a sanctioned subjects. It is prohibited to make available funds or other assets to sanctioned subjects directly or indirectly.
International Sanctions are generally widely publicised, and customers have to understand and take actions regarding International Sanctions that might be relevant for them. Therefore, in case business activities involve foreign countries, in order to better mitigate the risks related to International Sanctions Swedbank advises its customers to take appropriate risk-mitigation steps:
- to check what UN, EU and U.S. sanctions, as well as sanctions imposed by the local country are applicable for the particular country;
- to perform due diligence on their partners and customers;
- to discuss sanctions with their partners and customers;
- to consult responsible authorities or seek independent legal advice in case of any questions or doubt related to implementation of International Sanctions.
More information on EU sanctions and frequently asked questions can be found in the guidelines prepared by the Centre of Excellence in Anti-Money Laundering.
Useful information about international sanctions is also published on the website of the Ministry of Foreign Affairs of Lithuania.
Due to International Sanctions, Swedbank’s internal decisions and correspondent banks requirements, Swedbank has the right not to execute transactions (including crediting of funds) in any currencies directly and indirectly (e.g., the final consignee is located in the country/region) related to the EU and/or U.S. comprehensively sanctioned countries/regions:
- North Korea;
- Crimea, Sevastopol.
Swedbank may also hold the customer’s transaction to/from any country/region where embargoes, other restrictive measures are imposed or to/from other high-risk countries/regions in order to investigate whether this transaction is not related to International Sanctions and is in line with correspondent banks’ requirements, as well as with Swedbank’s internal decisions and its own risk appetite. The execution of stopped international transactions may be delayed and customers may be asked to provide additional information and/or documents about their transactions because of such investigation.
The list of countries/regions inter alia includes (the provided list is not full as International Sanctions, as well as Swedbank’s internal decisions can be imposed/revoked over the time):
- Myanmar (Burma);
- Sudan and South Sudan;
- Transnistria region;
- Lugansk/ Donetsk;
In assessing if transaction is related to the above-mentioned countries/regions Swedbank will investigate connections to imposed International Sanctions and analyse additionally:
- If transaction is related to a counterparty located or operating in one of the above-mentioned countries/regions. The relation could be direct (e.g. transaction is received from the sender with the address in Crimea) or indirect (e.g. transaction is received from other country (e.g. Turkey) but goods are being sent to Syria);
- If transaction is related to front companies which help to avoid direct connection to the above-mentioned countries/regions;
- If information provided in transaction details could be linked to the above-mentioned countries/regions (e.g. person name, vessel, name of city, harbour etc.);
- If transaction lacks a substantial information to understand the transaction’s purpose;
Swedbank would like to draw your attention to the fact that the term of executing international transaction (including crediting of funds) may be extended, or international transaction may be blocked or frozen by other banks which also participate in the execution of transaction (correspondent bank, bank of beneficiary or sender). Therefore, the customers should always evaluate potential International Sanctions risks by themselves.
Swedbank would like to draw your attention to the fact that both the EU and the U.S. imposed broad (comprehensive) International Sanctions related to Crimea and Sevastopol regions. These sanctions cover restrictions and prohibitions on imports, exports, investments and financing in relation to these regions.
Due to the current situation, Swedbank’s internal decisions and correspondent banks requirements, Swedbank will not, as a rule, perform international transactions (both outgoing and incoming) to these regions or related to these regions (e.g. beneficiary address is indicated in Crimea) in any currencies.
There are restrictive measures (Sectoral Sanctions) adopted by the EU and the U.S. on access to the capital market and new credits to defined Russian banks (i.e. Gazprombank, the Russian Agricultural Bank, Sberbank of Russia, Vnesheconombank, VTB Bank etc.). Swedbank has to ensure that international transactions related to the mentioned banks do not violate restrictions imposed. Therefore, Swedbank could conduct additional investigations on related transactions. As transactions associated with concealed financing are difficult to detect the fulfilment of the payment order may be delayed.
Both the EU and the U.S have imposed sanctions against the administrative bodies of the Lugansk and Donetsk regions, as well as subjects closely linked to such bodies. Execution of transactions, the addresses and details of which contain any reference to the respective regions and subjects registered there, may take more time or their execution may be refused, due to the restrictions and prohibitions in place.
- On 19 April 2021, US OFAC introduced new restrictions against 9 Belarusian businesses. The list of companies is provided on the official OFAC website. Sanctions are also imposed on companies and/or entities, in which listed sanctioned Belarusian companies own 50% or a larger part of shares.
- On 21 June 2021, the EU adopted new restrictive measures concerning 78 Belarusian individuals and 8 companies. Sanctions are also imposed on companies and/or entities, in which sanctioned companies and/or individuals have control functions and/or own 50% or a larger part of shares. Important! Exceptions regarding payments with a risk of EU sanctions are granted by the Financial Crime Investigation Service under the Ministry of the Interior of the Republic of Lithuania in accordance with the Ministry of Foreign Affairs of the Republic of Lithuania’s decision.
- On 24 June 2021, the EU adopted further targeted (sectoral) sanctions against Belarus. Targeted economic sanctions include the prohibition to sell, supply, transfer or export to anyone in Belarus, directly or indirectly, equipment, technology or software intended primarily for use in the monitoring or interception of the internet and of telephone communications as well as dual-use items and technology intended for military use. In addition, trade restrictions concerning petroleum products, potassium chloride and goods used for the production or manufacturing of tobacco products were introduced. Furthermore, access to EU capital markets is restricted and providing insurance and reinsurance to the Belarusian Government and Belarusian public bodies and agencies is prohibited. Important! The Centre of Excellence in Anti-Money Laundering has prepared information for Lithuanian businesses specifying what to pay attention to while implementing targeted (sectoral) sanctions imposed on Belarus by the EU. You can find it here.
- On 9 August 2021, US OFAC adopted further restrictions against 23 Belarusian individuals and 21 business entities. The list of individuals and companies as well as other useful information is provided on the official OFAC website. Sanctions are also imposed on companies and/or entities, in which listed sanctioned companies and/or individuals own 50% or a larger part of shares.
- On 2 December 2021, the EU and OFAC imposed new sanctions on high-ranking political officials of the Belarusian regime; Belarusian companies in the industrial and defense sectors, and companies in the tourism sector that helped organize and instigate illegal crossings of the EU’s borders. EU press release and list of newly sanctioned natural and legal persons. OFAC press release and list of newly sanctioned natural and legal persons.
Please note that Swedbank and its clients must respect international financial sanctions:
- when making payment transfers that are potentially related to Belarus, please assess whether the payment complies with international financial sanctions requirements, make sure to have documents justifying that and be ready to provide Swedbank with them (e.g., cooperation agreement, agreement between the parties participating in goods transportation, invoices, waybills, references of goods, certificates of origin, primary buyer, final beneficiary, etc.);
- due to information provided above, payment transfers that are potentially related to Belarus (including crediting of funds) may be delayed and/or declined, in some cases restricting access to payment funds and other assets.
Military goods cover military technology and equipment which might be used for internal repression or international aggression or contribute to regional instability.
Dual-use goods are items, including software and technology, which can be used for both civil and military purposes, and shall include all goods which can be used for both non-explosive uses and assisting in any way in the manufacture of nuclear weapons or other nuclear explosive devices.
Usually when arms embargoes/restrictions on dual-use goods are imposed, related technical, financial assistance, as well as other services are also prohibited. Although the primary responsibility for the classification of goods and technologies lies with the customers sending or receiving such items, the prohibition to provide financial assistance is also mandatory for financial institutions, it means for Swedbank as well.
The prohibition on military goods/dual-use goods means that Swedbank cannot participate in any financial transactions, provide business support or any financial support to customers that sell, supply, transfer, mediate or export such goods to restricted countries/regions (e.g. the Russian Federation), if they are intended for military purposes, or sell, supply, transfer or export such goods to the certain EU listed subjects. Therefore, Swedbank could conduct additional investigations on related transactions. Thus, the fulfilment of the payment order may be delayed.
There are items related to energy sector listed by EU which are restricted to be exported to the Russian Federation. U.S. has imposed restrictions on all goods/non-financial services or technology in support of energy projects. Therefore, Swedbank must be aware if the customer has an authorization from authorities in order not to be involved in prohibited transactions.
Please note, if you or your company operate(s) in the field of shipping or are (is) connected to mentioned field of activity, then according to international shipping area regulations it is mandatory to add the following information to the field “details of payment”:
- M/V: name of the ship;
- IMO: international maritime organisation number;
- FLAG: flag state;
- OWNERSHIP: name of the owner;
- REGISTRATION: number and the country.
Otherwise, transaction might be delayed since the missing details will be inquired from the bank of payer. If transaction is not performed in accordance with international standards (including the U.S. legal acts) transaction might be frozen in the correspondent bank.
Swedbank classifies field of Transportation as a high-risk industry by the reason of possible transportation of sanctioned goods (e.g. Military goods, Dual-use goods, Goods related to energy sector) and provision of services which are prohibited by UN, EU or U.S. requirements.
Please note, if you or your company operate(s) in the field of transportation or are (is) connected to mentioned field of activity, then you will be required to provide following information to Swedbank:
- Information regarding transported goods (including, but not limited to the following: certificates of origin of goods, bills, invoices, transportation documents (e.g. rail, airway bills), etc.);
- Information regarding final destination/final beneficiary of goods (beneficiary name, registration number, country, address);
- Information regarding consignor (consignor name, registration number, country, address);
If Swedbank requests you to provide information/documents and received information/documents will not include all necessary information, the fulfilment of the payment order might be delayed.
Swedbank does not tolerate situations when transaction data (i.e. beneficiary’s name/surname, address, etc.) is altered or stripped in order to bypass Swedbank risk mitigation measures or conceal potential links with subjects to International Sanctions.
Therefore, if your company operates in countries, which are included in Swedbank’s binding sanctions lists, you may be required to submit information regarding risks related to International Sanctions internal control system measures taken within your company.