The war in Ukraine has led to a number of public and private economic sanctions against Russia which may limit your ability to conduct commercial activities and send money to relatives in certain regions.
If you have any financial or commercial dealings with Russia, it's crucial that you are aware of the legal risks and limitations that apply.
Here's what you should know.
Here is more information on money laundering offences in NSW.
The Australian Minister for Foreign Affairs has implemented a number of restrictions on commercial activities and money transfers into Russia as well as the Donetsk and Luhansk regions of Ukraine.
This includes a prohibition in dealing with financial instruments issued by, or providing loans or credit to:
- specified publicly-owned or controlled Russian banks
- specified Russian companies predominantly engaged in activities relating to military equipment or services
- specified publicly-owned or controlled Russian companies involved in the sale or transport of crude oil or petroleum products
- majority owned subsidiaries or entities acting as agents for any of the above.
The Minister has also prohibited any dealings financially with eight members of the Russian Federation's security council. A continuously updated list of designated persons who form parts of sanctions can be found on the Department of Foreign Affairs and Trade website.
There are also restrictions on the provision of certain services to Russia from Australia. This includes a prohibition on:
- services which relate to the supply of arms or related matériel to Russia
- investment services which relate to sanctioned commercial activities.
- services to Russia, or for use in Russia, which relate to: a military activity, or the manufacture, maintenance or use of arms or related matériel.
- certain services to Russia (or to a person or entity for use in Russia) that are necessary for specified types of oil exploration or production projects in Russia.
IS IT A CRIME TO SEND MONEY TO RUSSIA? CONTRAVENING GOVERNMENT SANCTIONS
Serious criminal offences apply if an individual or corporation contravenes economic sanctions against Russia.
If an individual is found guilty of contravening an economic sanction, they are liable to up to 10 years in prison and/or a fine of up to $555,000 or three times the value of the contravening transaction.
If a corporation is found guilty of contravening an economic sanction, they are a liable for a fine up to $2.22 million or three times the value of the contravening transaction.
Offences for bodies corporate are " strict liability" – meaning that it is not necessary to prove any fault element (intent, knowledge, recklessness or negligence) to be found guilty.
The honest and reasonable mistake of facts defence may apply to strict liability type offences.
Along with government sanctions, there have been an increasing number of private companies who have suspended any money transfers to Russia. These include PayPal, Wise, Western Union, Visa, Mastercard, Apple Pay and Google Pay.
Russian banks have also been barred from SWIFT – a messaging system banks use to facilitate transactions. This means you will be unable to send or receive money from accounts which are subject to a boycott, including Russian State Development Bank, VEB, Promsvyazbank, Rossiya, IS Bank, the General Bank and the Black Sea Bank.
There are early attempts to provide alternatives to SWIFT for Russian banks, including China's Cross-Border Interbank Payment System, which may allow transfers to and from China and Russia.
Moreover, some private companies still allow money transfers to Russia but this is a consistently changing environment. Some have suggested that cryptocurrency may become increasingly popular in the region due to sanctions and boycotts.
However, this is a rapidly changing environment so it is best to directly inquire with the companies you wish to use to transfer money into or out of Russia.
If you have any financial dealings with Russia in this current volatile environment, it's advisable that you seek legal advice to get a complete understanding of any risks.