The decision to impose sanctions was made by the National Security and Defense Council. It concerns former President of Ukraine Petro Poroshenko and several owners of large financial and industrial groups. VB Partners’ attorney, Yulia Kuznets, who specializes in Sanctions, analyzed for LIGA.net what impact the sanctions may have on the businesses of these individuals.
The consequences of sanctions can be divided into two groups:
- personal
- for the business of the sanctioned person
As for the key personal consequences, the sanctions make it impossible to use and dispose of assets in Ukraine.
In addition, the NSDC’s decision will significantly complicate operations abroad: the person will be included in such international databases as LexisNexis, World-Check, etc. This will create difficulties in conducting transactions in foreign banks (even before such transactions are blocked).
The application of the “asset freeze” sanction creates a risk of nationalization of all assets in Ukraine in the suit of the Ministry of Justice. Both assets directly owned by Petro Poroshenko and those controlled by him are at risk of nationalization, the lawyer explains.
As for the key risks for business, this is primarily a detailed financial monitoring of transactions conducted by companies that are directly or indirectly owned by a sanctioned person.
There is also a risk that counterparties will refuse to cooperate with such companies.
