Curaçao and Sint Maarten also affected by sanctions against Russia and Belarus



Philipsburg / Willemstad – The European Union (EU), the United States (US) and other countries have announced and imposed multiple sanctions on Russia in recent days. The sanctions were issued in response to the recent incursion of Russian forces into Ukraine. These include sanctions against the Russian central bank and the exclusion of a number of Russian banks from Swift.

What do the sanctions against Russia’s central bank involve?

Central banks hold accounts with other central banks as well as sometimes with private financial institutions abroad. The money and securities held on those accounts are denominated in the currency of the country where that central bank or private institution is established. It is therefore common for central banks around the world to hold accounts among themselves in each other’s currencies.

One important aim of holding foreign currency is to ensure smooth inter-country payments in different currencies.

The Russian central bank holds reserves in several countries—directly with the central banks and/or with private institutions. The sanctions against the Russian central bank are intended to cut off its access to the funds it holds elsewhere. This means, for instance, that Russia no longer has access to its dollars in the U.S., rendering it difficult for this country to make international payments. This sanction also makes it hard for the Russian central bank to maintain the stability of Russia’s currency, the ruble, which could lead to its rapid depreciation.

What does the exclusion of some Russian banks from SWIFT mean?

The Russian banks affected are not able to send or receive funds to or from foreign banking
institutions. As a result, these Russian banks are now excluded from the international payment system.

For Curaçao, this means that companies and individuals with accounts at these banks are unable to conduct international transactions. Neither is it possible to transfer any funds to these account holders. The sanctions also mean that claims against foreign customers with an account at these Russian banks cannot be collected at this time.

Given the current state of affairs in Ukraine, additional sanctions are being imposed on Russia almost daily. By law, Curaçao and Sint Maarten are required to implement EU sanctions. It is important for institutions in Curaçao and Sint Maarten to be aware that certain transactions and juristic acts addressed by sanction lists of foreign countries, such as those of the OFAC (Office of Foreign Assets Control), or of international organizations such as the United Nations, may affect their (international) business operations.

What does the Centrale Bank van Curaçao en Sint Maarten (CBCS) expect from the institutions under its supervision?

  • That they continue to monitor developments, particularly the international sanctions.
  • That they consult the EU website1 with added frequency for the implementation of
    international sanctions;
  • That their sanctions screening systems be functioning properly and that their customer
    databases be monitored based on the most current applicable sanctions lists. It is
    important for supervised institutions to be agile in their response to changes to the current lists;
  • That, where applicable, their payment screening systems use the most current applicable sanctions lists and that these institutions be agile in their response to changes to those lists;
  • That they promptly implement any applicable orders and prohibitions imposed pursuant
    to the sanctions by freezing the assets and/or economic resources and preventing these
    from being made either directly or indirectly available—in other words, that they prevent
    the provision of any banned financial services.
  • That any freezing of funds be reported to the CBCS immediately;
  • That, in the event of a “hit” which may be designated as an unusual transaction within the meaning of the National Ordinance on the Reporting of Unusual Transactions (of Sint
    Maarten and Curaçao), the transaction be reported immediately to the Curaçao FIU or to
    the Sint Maarten FIU, respectively.