Written answers
Tuesday, 9 May 2023
Department of Finance
Ukraine War
Brendan Griffin (Kerry, Fine Gael)
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90. To ask the Minister for Finance if he is satisfied that all Irish-based financial services operations are adhering to financial sanctions imposed against Russia following its invasion of Ukraine; and if he will make a statement on the matter. [21466/23]
Michael McGrath (Cork South Central, Fianna Fail)
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In response to Russia’s unjustified, illegal invasion of Ukraine, every European Union Member State including Ireland has been obliged to introduce a range of sanctions targeting the Russian economy. These sanctions include freezing assets prohibiting certain transactions and removing Russian banks from the SWIFT messaging system. The frozen assets in question are owned or controlled by the Russian State as well as a range of individuals and entities that are closely aligned to Russia and its war effort.
The aim of such sanctions is to dissuade Russia in its aggression, to withdraw from Ukraine and to undermine the financial and material support which supplies Russia’s armed forces.
Ireland has three competent authorities for all sanctions - the Department of Foreign Affairs, the Department of Enterprise, Trade & Employment and the Central Bank of Ireland. They oversee the different aspects of restrictive measures. In terms of financial sanctions, the Central Bank of Ireland has responsibility for ensuring these measures are implemented.
It is worth noting that there is a legal obligation on all legal and natural persons in the State to comply with sanctions, irrespective of their regulated status. A breach of a financial sanction is a criminal offence. Any person who holds the assets of a sanctioned entity or individual is required to freeze the assets and report such freezing to the Central Bank of Ireland.
For financial sanctions, the Central Bank of Ireland undertakes the following steps to ensure implementation:
- Communicates widely that new sanctions measures have been adopted;
- Maintains records of all frozen assets;
- Assesses applications for derogations from implementation of sanctions, for specific reasons;
- Issues any direction that it deems necessary in order to administer and enforce financial sanctions; and
- Reports any suspected breaches of sanctions, to An Garda Síochána.
The Central Bank of Ireland has also written to various representative bodies in the non-regulated sector to alert them to their obligations under the sanctions Regulations and to remind them in particular of the obligation to freeze and report the assets of sanctioned individuals.
Supervisors wrote to firms to notify them of the imposition of the Russia/Ukraine sanctions and provided firms with a link to the Central Bank's dedicated page on Russian sanctions. It was also highlighted that firms need to have robust processes in place to comply fully with their sanctions obligations and mitigate the risk to their businesses posed by the sanctions.
The Central Bank has seen a significant focus on Russia/Ukraine related issues and sanctions compliance in supervisory engagements with obliged entities which are under its supervision and has been proactive in meeting these concerns.
Finally, the Central Bank of Ireland continues to engage with its European counterparts and its regulated entities to ensure that there is strong awareness of the EU sanctions regime and the need for firms to continue to effectively implement all EU sanctions. The Central Bank of Ireland has also written to Russian-linked Special Purpose Entities (SPE) to seek confirmation of their adherence to sanctions.
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