International Sanctions take various forms based on their purpose objective (e.g. to prevent armed conflict, counter terrorism).
They can be individual (e.g. travel ban, asset freeze), target goods and services (e.g. arms embargoes or proliferation-related goods, dual-use goods, luxury goods, etc.),
can be focused on core economic sectors (e.g. oil or financial sectors,
goods which could contribute in particular to the enhancement of country's industrial capacities) or be comprehensive targeting entire country (e.g. North Korea).
Swedbank implements international and national Financial Sanctions based on Law on International Sanctions and National Sanctions of the Republic of Latvia.
It has to be pointed out that depending on the countries where the financial institutions operate, the lists of sanctions which the financial institutions follow could slightly differ.
Additionally, Swedbank considers correspondent bank requirements as well as its own internal regulations.
Therefore, Swedbank will not engage in any actions that directly or indirectly circumvent the Financial Sanctions prohibitions, correspondent bank requirements or Swedbank Policy on financial sanctions.
Below are provided major types of Financial Sanctions implemented within Swedbank:
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Targeted asset freezes.
Swedbank has an obligation to freeze all financial resources and financial instruments owned,
held or controlled by subjects of EU, UN and LV financial sanctions and not to allow making funds available to such persons.
In case of U.S. and UK imposed sanctions Swedbank will reject transaction or refrain from provision of any products/ services related.
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Arms embargoes/ restrictions on dual-use goods and technology for military purposes (Defence sector).
Swedbank is obliged not to participate in provision of financial assistance related to mentioned goods or related services.
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Core economic sector sanctions (Financial, Energy sectors.
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).
It is important to mention that the asset freeze and some sectoral restrictions are also applicable to entities that are owned or controlled, directly or indirectly, by a designated person.
Although those entities may not be designated and included into sanctions lists the same Financial 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 entities.
Each Customer has to assess potential International Sanctions’ risks when involving themselves in business transactions.
International Sanctions are generally widely publicised, and Customers, especially operating internationally,
have to understand and take action regarding International Sanctions (not only Financial Sanctions) that might be relevant for them.
Therefore, customers have to consider business activities which could be exposed to International Sanctions and take appropriate risk mitigation steps.
The information provided above is not all-embracing, and customers are advised to consult responsible authorities or should seek independent legal advice in case of any questions related to implementation of sanctions.
Based on decisions adopted by Swedbank and terms and conditions of Swedbank's correspondent banks,
Swedbank has the right not to execute payments (incl. crediting of incoming payments) in any currencies related to following prohibited countries and territories:
- Iran;
- Syria;
- North Korea;
- Crimea, Sevastopol
Swedbank may also hold the customer’s payment in order to investigate whether the payment
is not posing sanctions risk and is in line with Swedbank internal decisionsand correspondent banks’ risk appetite to/from any country/region where embargoes,
other restrictive measures are imposed or to/from other high-risk countries/ regions.
The execution of stopped payments may be delayed and customers may be asked to provide additional information about their transactions as a consequence of such investigation.
List of countries or regions which are subject to International sanctions or to which Swedbank may restrict payments (this list is not exhaustive, as International sanctions may be withdrawn or new ones introduced, and their scope may change):
- Cuba;
- Iraq;
- Myanmar (Burma);
- Libya;
- Sudan and South Sudan;
- Yemen;
- Somalia;
- Transnistria region;
- Donetsk, Kherson, Luhansk and Zaporizhzhia regions
- Afghanistan;
- etc.
While performing assessment of payment relation to above mentioned countries/ regions the Bank will check applicable sanctions and investigate:
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If the payment is related to a customer`s client located or operating in one of the above-mentioned countries.
The relation could be direct (e.g. payment is received from the sender with the address in Crimea) or indirect (e.g. payment is received from other country (e.g. Turkey) but goods are being sent to Syria);
- If the payment is related to front companies which helps to avoid direct connection to above-mentioned countries;
- If information provided in payment details could be linked to above-mentioned countries (e.g. person name, vessel, name of city, harbour etc);
- If the payment lacks a substantial information to understand the payment purpose;
- Etc.
Additional observations
Swedbank would like to draw your attention to the fact that the term of executing payments or when its already executed (incl. crediting of incoming payments),
may be extended or payments may be blocked or frozen by other banks than Swedbank which also participate in the execution of payment (correspondent banks, bank of beneficiary or sender).
Swedbank will not compensate its customers for any damage resulting from the payment being frozen. Therefore, the customer should always evaluate potential International Sanctions risks by themselves.
Useful links:
Swedbank would like to draw 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.
In 2022, multilateral organisations and different countries (such as U.S.) have imposed trade restrictions and prohibitions in the sectors of transport,
telecommunications, energy or the prospecting, exploration and production of oil, gas and mineral resources and import of goods originating in the non-government-controlled areas,
such as Donetsk, Kherson, Luhansk and Zaporizhzhia regions.
Due to the current situation, internal decisions and the risk policies of the main correspondent banks, Swedbank will not, as a rule,
execute payments (both outgoing and incoming) related to these regions (i.e. beneficiary address is indicated in Crimea or in other cases where any connection to these regions have been identified) in any currencies.
In response to Russia's unprecedented and unprovoked military attack on Ukraine, a number of International sanctions have been imposed on Russian Federation, as well as on the Republic of Belarus.
The current situation has made transactions with Russia and Belarus very risky. Customers who make payments or send goods to Russia run a real risk of losing their money or goods.
That is why Swedbank has suspended payment services to and from Russia and Belarus, except for very few exceptions, such as pension payments. Incoming payments will be returned to the originator.
Military goods cover military technology and equipment which might be used for internal repression or international aggression or contribute to regional instability.
Dual-use good 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 manufacture of arms and military equipment, mass destruction weapons or their delivery etc.
Usually when arms embargoes/ restrictions on dual-use items 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 the Bank.
The prohibition on military goods/ dual-use items 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 (e.g. Russian Federation), if they are intended for military purposes, or sell, supply, transfer or export such goods to the certain EU listed entities.
Therefore, Swedbank could conduct additional checks on related payments. Thus, the fulfilment of the payment order may be delayed or cancelled.
There are items related to Energy sector listed by EU which are restricted to be exported to Russia. U.S. has imposed restrictions on all goods/ non-financial services or technology in support of energy projects.
Therefore, Bank must be aware if the Customer has an authorization from competent or sanctions-issuing authorities in order not to be involved in prohibited transactions.
In response to the military aggression, the EU has significantly expanded sanctions against Russia, adding unprecedented restrictive measures to the list of sanctions,
supplementing the existing measures applied to Russia since 2014 in connection with the annexation of Crimea and non-implementation of the Minsk agreements.
The newly introduced sanctions against Russia include not only an embargo on goods, but also a ban on the provision of services.
Goods that cannot be exported to Russia, for example, are: goods and technology suited for use in aviation or space industry, luxury goods,
maritime navigation goods and technology, goods and/or technology suited for use in oil refining, goods which could contribute in particular to the enhancement of Russian industrial capacities.
Goods that cannot be imported from Russia includes: crude oil and refined petroleum products, coal and other solid fossil fuels, steel, gold including jewellery, cement, wood, paper and plastic,
seafood and alcoholic beverages. The EU has prohibited the provision of certain business-related services to the Russian government, or any legal entity established in Russia:
accounting services, IT consulting, legal consulting, architectural and engineering services, advertising, market research and public opinion research services.
Please note that the above lists are not complete, the full list of prohibited goods and services, as well as other restrictions can be found in the link below.
Link to EU Common Military List: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52015XG0421(05)&from=EN
Link to EU Dual use controls: http://ec.europa.eu/trade/import-and-export-rules/export-from-eu/dual-use-controls/index_en.htm
Link to EU Council Regulation related to Russia sectoral sanctions: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02014R0833-20231001
Please note, if You or Your company operates in the field of shipping or is connected to mentioned field, then according to international shipping area regulations it is mandatory to add 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
- TREGISTRATION: number and the country
Otherwise, payment might be delayed since the missing details will be inquired from the bank of payer.
If the payment is not in accordance with international standards (including the U.S. legal acts) the payment might be frozen in the correspondent bank.
Please pay attention, that there are multiple restrictions on shipping sector imposed by EU, U.S. etc.
(ex. Russian ships are prohibited from docking in EU ports). Therefore, if during evaluation Bank identified sanctions risks, transaction may be rejected/returned to sender due to Swedbank Internal policy reason.
AS SWEDBANK classifies field of Transportation as a high-risk industry by the reason of possible transportation of sanctioned goods
(ex. Military goods, Dual-Use goods, Goods related to energy sector etc.) and provision of services which are prohibited by EU, U.S. OFAC, UK or UN legal requirements.
Please note, if You or Your company operates in the field of transportation or is connected to mentioned field, then you will be required to provide following information to the bank:
- Information regarding transported goods (including, but not limited to the following: Certificate of origin of goods, bills, invoices, transportation documents (ex. rail, air waybills) etc.)
- Information regarding final destination/final beneficiary of goods (beneficiary name, registration number, country, address)
- Information regarding consignor (beneficiary name, registration number, country, address).
If Bank requests You to provide documents and received information will not include all necessary information, payment might be delayed or rejected according to Swedbank Internal policy reason.
Therefore, if Your company operates in countries, which are included in Swedbank Prohibited countries and territories list,
in countries or regions which are subject to International sanctions, or in countries with increased sanctions risk,
you will be required to submit information regarding sanctions risk internal control system measures taken within Your organisation.
