U.S. officials are increasingly relying on economic sanctions as a tool of foreign policy, but the effectiveness of sanctions in achieving policy objectives is questionable, according to Bryan Early, political science professor at University at Albany.
At its highest levels, Russian corruption over the past 20 years has been disguised by networks of shell companies and facilitated by foreign banks willing to turn a blind eye to state embezzlement, according to Karen Dawisha, a political science professor at Ohio-based Miami University.
This time last December, one might reasonably have expected that 2014 would be a year of modest changes for the anti-money laundering and sanctions compliance sector. Then came JPMorgan Chase, BNP Paribas and a convoy of Russian tanks to quash that notion.
Three years after a financial crisis that left its banking system in disarray, Cyprus has been rapidly revoking corporate charters in an effort to satisfy intergovernmental bailout demands.
European lawmakers in a resolution Thursday asked the EU's executive branch to consider barring Russian banks from the world's largest interbank messaging platform in response to violence in Ukraine.
The expansion of Western sanctions targeting Russia will require banks to closely vet additional types of credit and transactions tied to financial, energy and defense firms, according to attorneys.
The EU on Monday adopted extended sanctions targeting Moscow's oil and defense industries' measures expected to raise compliance costs for banks in the economic bloc, once implemented.
Military clashes in Ukraine are complicating behind-the-scenes efforts by some EU nations to prevent new sanctions and roll back existing financial restrictions targeting Russia.
The European Union Tuesday further restricted Russia's access to the continent's financial markets and energy technology industry and promised targeted sanctions against individuals and entities on Wednesday.
With the blacklisting of three Russian financial institutions Tuesday, the United States has targeted nearly a third of the assets controlled by the federation's banking sector, according to a senior U.S. official.
The U.S. Treasury Department Wednesday imposed its strongest sanctions to date in response to Russia's role in Ukrainian violence, blacklisting 12 companies in the federation's financial, energy and defense sectors.
Ukraine must improve its efforts to fight corruption and curtail money laundering by political figures and others as part of a $17 billion bailout agreement with the International Monetary Fund.
U.S. sanctions against 17 Russian individuals and companies, including three banks and the head of one of the nation's largest energy companies, will raise more questions than answers for compliance officers.
Although sanctions on Russian nationals and companies might seem fairly innocuous at first blush, compliance departments at European banks are finding the task of identifying designees unusually difficult, say legal experts.
Plans by Russia to develop an independent payment network could limit the U.S. government's window into illicit finance in the federation, say analysts.
Diplomatic tension over Ukraine has raised doubts that the United States will attend an upcoming Moscow plenary of the world's largest anti-money laundering task force, say current and former officials.
International banks are bracing for economic sanctions against Russian officials beyond those announced Monday by Western nations, according to compliance officers.
The Obama administration is "actively" considering designating Russians linked to the invasion of Ukraine under a 2012 human rights law, according to a U.S. State Department official.
Ukraine's widespread protests and weakened political stability are likely to prompt nervous investors and corrupt officials alike to move their money abroad, say economic analysts.
Cyprus has missed deadlines to improve its anti-money laundering regime under terms brokered last spring to receive a €10 billion euro bailout, according to a review by the European Commission.