Sanctioned Countries Policy
Financial Sanctions are enforced by the UK government and prohibit UK organisations from carrying out transactions with individuals, entities and countries facing sanctions. These sanctions are put in place with the aim to maintain or restore international peace and security and fight aggression, terrorism, criminal behaviour or violation of human rights.
The UK Government Website is regularly updated with the latest information and lists of individuals facing financial sanctions and changes emailed weekly to the Finance Department . In addition, the government charity sector guidance is checked annually by the Finance Department to consider any relevant updates.
Financial Sanctions take the form of imposed trade restrictions on individuals, entities and bodies. Financial Sanctions are intended to limit targets’ access and ability to use funds and economic resources. They are imposed in order to:
- Coerce a regime, or individuals within a regime, to change their behaviour
- Constrain a target by denying them access to key resources needed to continue their offending behaviour, such as terrorism financing or nuclear proliferation
- Protecting the value of assets that have been stolen from a country until they can be repatriated.
The UK Government maintains a list of which people, entities and ships are designated or specified under regulations made under the Sanctions and Anti-Money Laundering Act 2018, and why.
The most common types of Financial Sanctions currently in use are:
- Targeted asset freezes – these prevent targets from moving money or assets from beyond their own jurisdictions; and
- Restrictions on financial markets and services, investment banks and prohibition of banking relationships.
The University must comply with the requirements imposed on it by each of the banks that it has an established relationship with. It must also comply with bank policies with respect to any financial transactions with sanctioned/ high risk countries, business entities or individuals.
Each banking institution has their own policy, and countries under sanction or flagged as higher risk will vary from bank to bank. Banking institutions often have a tiered approach to their risk policy and restrictions to business relationships and transactions can be broadly categorised as Forbidden, Higher Risk and Low Risk. These categorisations are explained below.
|Forbidden||Business relationship is forbidden.||Cuba, Iran, North Korea, Syria, Venezuela, Crimea/Sevastopol|
|Higher Risk||Any work that is planned with the governments, government agencies or government owned entities may be subject to enhanced Know Your Customer checks.||Afghanistan, Belarus, Burundi, Central African Republic, Democratic Republic of Congo, Egypt, Republic of Guinea, Republic of Guinea-Bissau, Iraq, Lebanon, Libya, Mali, Myanmar (Burma), Nicaragua, Russia, Somalia, South Sudan, Sudan, Tunisia, Ukraine, Yemen, or Zimbabwe|
|Low Risk||No specific banking restrictions. Follow UK Government and University ‘know your customer’ risk assessments.||All other countries.|
(updated July 2021 - As per Lloyds, Barclays and HSBC restrictions.)
The Office of Foreign Assets Control ("OFAC") of the US Department of the Treasury administers and enforces economic and trade sanctions based on US foreign policy and national security goals.
OFAC publishes lists of individuals and companies owned or controlled by, or acting for or on behalf of, targeted countries. It also lists individuals, groups, and entities, such as terrorists and narcotics traffickers designated under programs that are not country-specific. The Sanctions Programs and Country Information webpage contains links to all sanction lists currently active.
The University is also required to comply with US financial sanctions. This is a covenant requirement as stipulated in the funding agreement dated 2019. The covenant however does stipulate the following activities are permitted - recruiting students, receiving fees from students, recruiting academics and research activities from its requirement.
The University of York is fully committed to and has a legal obligation to comply with these sanctions. Payments to or receipts from countries, business entities or individuals that are subject to sanctions will present problems as all transactions are subject to bank clearance or approval.
The following activities require consideration:
- Recruitment of students;
- Formal research collaborations;
- Informal collaborations;
- Presentations at conferences by individuals in sanctioned countries;
- Travel to sanctioned countries and sharing research and knowledge in certain identified fields of study;
- The employment of individuals from sanctioned countries in certain identified fields of study or areas that have prohibited sharing of proscribed technical expertise.
Banks and other financial Institutions are generally supportive of activity pertaining to sanctioned country students in the UK. However it is important that problems are prevented from arising by being aware of the application of any sanctions BEFORE any obligation to pay or receive funds from/ to a sanctioned country. As such, it is vitally important that checks are undertaken before any agreement, or contract has been signed or agreed verbally.
Always consult Group Financial Accounts when any activities relating to sanctioned countries are initially discussed. Any request to commence business relationships or process payments relating to sanctioned countries will be assessed on a case by case basis by the University Executive Board to ensure all risks are assessed and compliance issues addressed.
The University must not maintain relationships, process payments to or from, or undertake commercial transactions with entities or individuals based in the countries listed as ‘Forbidden’.
Transactions from Forbidden Sanctioned Countries should be referred to Group Financial Accounts for prior approval. Group financial accounts will then submit this information to the University bankers for approval.
Higher Risk Countries
The University must undertake a risk assessment prior to entering into business relationships with entities or individuals based in the countries listed as ‘Higher Risk’. This should form part of the standard Know Your Customer (KYC) checks.
Any areas for concern must be reported to Group Financial Accounts for review.
The University expects staff at all levels to:
- Be aware of the applications and scope of Financial Sanctions;
- Undertake checks on these third parties before entering into business relationships with them;
- Discuss any concerns or queries with Group Financial Accounts
- Request University Executive Board approval before in advance of any obligation to pay or receive funds or approve contracts with Sanctioned Countries; and
- Report breaches/ non-compliance of Financial Sanctions via the University’s Speak Up policy.
|Prepared by||Ben Jackson, Treasury Manager||October 2021|
|Reviewed by||Ian Smallwood, Group Finance Manager||October 2021|
|Reviewed by||Ruth Clark, Group Financial Controller||October 2021|
|Approved by||Finance Senior Management Team||October 2021|
|Approved by||University Executive Board||November 2021|
|Published||Finance Department Website||December 2021|
|Date of review of policy||3 years after UEB approval||September 2024|
|Document owner||Group Financial Accounts|