Sanctions Risk for Foreign Financial Institutions that Join Russian Financial Messaging System, System for Transfer of Financial Messages updated guidance

Date issued: Nov. 21 2024

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TURBOFAC Commentary (366 words)

Notes:

1) Read in conjunction with Sanctions Risk for Foreign Financial Institutions that Join Russian Financial Messaging System, System for Transfer of Financial Messages (OFAC’s leading guidance document concerning the secondary sanctions targeting FFIs), and compare FAQ # 1082 (threatening secondary sanctions on FFIs that enter into “new or expanded agreements with NSPK” where “NSPK is the operator of Russia’s MIR National Payment System, which clears and settles payments between consumers, merchants, and banks for debit and credit card payments, primarily in the Russian Federation”). Here, OFAC has blocked SPFS, which is effectively a Russian alternative to SWIFT. OFAC states that “that any foreign financial institution that joins or has already joined SPFS may be designated for operating or having operated in [the Russian financial services sector] pursuant to Executive Order (E.O.) 14024” and also that “OFAC views joining SPFS after publication of this...