Olena Yurchenko and Denys Hutyk held online-Lecture for EBA: “How to avoid toxic clients, counterparties, and business partners in order not to be sanctioned.”

16:47, 15.04.2024

On April 9th, Olena Yurchenko and Denys Hutyk spoke with representatives of Ukrainian and international companies during a lecture titled "How to Avoid Toxic Clients, Counterparties, and Business Partners to Avoid Sanctions", organized by the European Business Association's Management Development Center and Truman Company. 

During the lecture, the speakers discussed with businesses the main trends in sanction policy for 2024 and talked about key tools for understanding and complying with sanction legislation. The recommendations from the ESCU experts aim to prevent critical technologies from reaching aggressor countries and reduce the likelihood of financial and reputational losses for entrepreneurs. 

Senior analyst of the ESCU, Olena Yurchenko, informed attendees on how to identify potential risks using open sources, including specialized resources from government agencies, media, social networks, open registries, and commercial databases of customs and trade data. Olena also shared the most important indicators to help companies identify unreliable counterparties. Among the key red flags: 

  • Presence in sanction lists and databases of risky individuals; 
  • Connections with the military-industrial complex; 
  • Direct or indirect ties with sub-sanctioned individuals; 
  • Sharp changes in corporate structure, management format, business type, or registration address; 
  • Multiple business activities or registration locations; 
  • Operations in Russia or other high-risk jurisdictions for sanction evasion; 

Overall, the ESCU presented about 30 red flags related to both the characteristics of an individual or legal entity and the type and geography of their activities, as well as their history of establishment and business activity. 

Denys Hutyk, an advisor to the ESCU, emphasized the importance of quality and strategic communications for effective sanction compliance. Public accountability, internal communications within the company, and proactive public relations are the foundation not only for implementing corporate standards but also for mitigating business and reputational risks.