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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].”