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Russia sanctions: reputational risk cannot be overstated

Author: ICAEW Insights

Published: 04 Mar 2022

In the light of international sanctions, ICAEW members are urged to look hard at any connections with Russia among their clients and perform careful due diligence.

ICAEW’s Managing Director, Reputation and Influence, Iain Wright, believes that the reputation of the profession is at stake. “Sanctions are meant to bring home to the Kremlin the political and financial cost of their aggression in Ukraine,” he says. “Making that happen is a moral imperative and that must be our priority.” 

If an individual or organisation is not on the UK sanctions list, it does not mean that they are risk-free. They may appear on non-UK sanctions lists, be a PEP or a high AML risk. Now more than ever, firms must consider their due diligence from a commercial, AML and reputational perspective. It is also in the public interest to take a careful approach in order to do the right thing.

“It’s less than a century since the continent of Europe faced the horror and consequences of an autocratic regime’s invasion of a free and sovereign country. Failure to act responsibly on this could be seen on a par with turning a blind eye to the war crimes and atrocities of the past,” says Wright. “Our Code of Ethics highlights the accounting professional’s responsibility to act in the public interest, beyond the needs of an individual client or employer.”

Ethics and the public interest are paramount, says Wright. “Acting in the public interest is not only the right thing to do, it will have consequences for reputations for decades to come. Most of the world is rightly on the side of the brave Ukrainian resistance.” In the case of the Russian invasion of Ukraine, the public is global. “Any individual or company seen to be abetting the Putin regime runs the risk of being viewed as a pariah [in the global economy].”

Our Code of Ethics highlights the accounting professional’s responsibility to act in the public interest, beyond the needs of an individual client or employer.

Iain Wright Managing Director, Reputation and Influence

ICAEW works to protect the public interest by making sure its members maintain the highest standards of conduct, benefiting the economy and protecting the integrity of the accountancy profession. It strongly condemns the Russian government for its invasion of Ukraine and is concerned about how the war is unfolding.

 “It is great to see the strong and unified response from countries and organisations across the world – including the historic vote by the UN General Assembly. We support the sanctions put in place by the UK, EU and the US,” he says. “We have also seen many of our members stand up to do their part in enforcing these sanctions, reach out and offer support to colleagues and clients with ties to Ukraine, and by offering charitable aid.”

ICAEW is offering to provide the UK government technical input on the Economic Crime Bill now going through parliament. It will also provide information, guidance and resources to members to ensure it is effective, and that ICAEW Chartered Accountants can help the companies they advise or lead cope with the economic fallout of the crisis.

How members are responding

Chartered Accountants from across the membership have reached out to share how they are responding to the sanctions. Many are re-screening all clients with connections to Russia. Members are looking at all sanctions lists – not just the UK’s – to inform their due diligence. Chartered Accountants are doing open-source research to ensure that clients with ties to the Russian regime are appropriately dealt with, even if they appear on no sanctions lists.

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ICAEW Members can contact our free confidential helpline for advice and support on technical, ethical, anti-money laundering and fraud issues.

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Support for members during the Ukraine crisis

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Guides to affected countries

ICAEW's Library and Information Service produces guides for members who are considering doing business in overseas countries. There are separate guides for Ukraine and its neighbours, all of which include updates on the latest sanctions and restrictions.


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