Enhanced due diligence following the recommendations for Foreign Financial Institutions on OFAC Sanctions targeting support to Russia’s Military-Industrial Base.
Enhanced due diligence following the recommendations for Foreign Financial Institutions on OFAC Sanctions targeting support to Russia’s Military-Industrial Base.
JSC “KDB Bank Uzbekistan” (the Bank”) hereby informs the following with regard to actions being taken to mitigate sanctions risk.
On 22 December 2023, an Executive Order * (E.O.) was signed by the President of the United States which broadens the criteria for the application of restrictive measures under the sanctions program imposed on the Russian Federation by Executive Order 14024 dated April 15, 2021 ("E.O. 14024").
Sanctions may now be imposed on Foreign Financial Institutions ("FFIs") that conduct or facilitate significant transactions:
- with sanctioned persons for operating or having operated in the technology, defense and related materiel, construction, aerospace, or manufacturing sectors of the Russian Federation economy (“the Specific Sectors” **); and
- or provided any service involving the military-industrial base of the Russian Federation, including the sale, supply or transfer, directly or indirectly, of any item or class of items to the Russian Federation (“the Specific Items” ***).
As restrictive measures, OFAC (Office of Foreign Assets Control of the US Department of the Treasury) can impose full blocking sanctions on, or prohibit or restrict the maintenance of correspondent or payable-through accounts with respect to FFIs determined to meet the criteria set forth above, including freezing the FFI's assets in the United States.
Based on OFAC's **** recommendations and the Sanctions Risk Appetite of the Bank, JSC “KDB Bank Uzbekistan” should apply the enhanced due diligence measures to foreign trade operations of customers as well as the customer base, including but not limited to conducting KYC on customers to determine their exposure to the Specific Sectors, informing customers that they may not use their accounts to do business with designated persons operating in the Specific Sectors or conduct any activity involving military-industrial base, and implementing enhanced controls over transactions involving the Specific Items.
* //www.whitehouse.gov/briefing-room/presidential-actions/2023/12/22/executive-order-on-taking-additional-steps-with-respect-to-the-russian-federations-harmful-activities/
** The Secretary of the Treasury, in consultation with the Secretary of State, has the authority to determine that additional sectors support Russia’s military-industrial base and thus may be used for targeting under E.O. 14024
*** //ofac.treasury.gov/media/932446/download?inline
**** //ofac.treasury.gov/media/932436/download?inline