General information about financial sanctions
International Sanctions are restrictive non-military measures put in place in order to preserve the international peace and security, as well as respect for human rights. They are imposed by United Nations (UN), European Union (EU) or by individual countries (e.g. United States (U.S.)). International sanctions are imposed against entire states, as well as natural and legal persons, who violate the human rights, commit ethnical, territorial conflicts, support terrorism, violate other international norms and principles.
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), can be focused on core economic sectors (e.g. oil or financial sectors) or be comprehensive targeting entire country (e.g. North Korea).
Swedbank, as well as all other financial institutions, implements international Financial Sanctions. 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.
Financial Sanctions implemented by Swedbank:
UN. All UN member states are obliged to accept and carry out Resolutions passed by UN Security Council.
EU. These are implemented through EU Council Regulations and have direct effect in all member states.
Bank also implements relevant U.S. Financial Sanctions based on the Swedbank Group Financial Sanctions Policy. U.S. Financial Sanctions are imposed by U.S. President Executive Orders and implemented by the U.S. Department of the Treasury Office of Foreign Assets Control (OFAC).
By following U.S. Financial Sanctions, the Bank is being able to keep and maintain relations with banks in U.S. jurisdiction and provides payments and other products/services in USD currency or related to U.S. persons to its customers.
Additionally, Swedbank considers correspondent bank requirements as well as its own risk appetite. Therefore, Swedbank will not engage in any actions that directly or indirectly circumvent the Financial Sanctions prohibitions, correspondent banks and internal decisions.
Below are provided major types of Financial Sanctions implemented within Swedbank:
- Targeted asset freezes. Swedbank has an obligation to freeze funds of EU blocked person and not to allow making funds available to EU Blocked persons. In case of U.S. imposed sanctions Swedbank will reject transaction or will not provide any products/ services related to OFAC SDN List subjects.
- 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.
- 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 of goods/ services related to oil sector).
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 designated persons. Although those entities may not be itself 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 ones) 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 competent authorities or should seek independent legal advice in case of any questions related to implementation of International Sanctions.