The interests of large business give US sanctions policy a special flavor. Any of us may find ourselves subject to sanctions even if the law does not require it.

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The interests of large business give US sanctions policy a special flavor. Any of us may find ourselves subject to sanctions even if the law does not require it.

Unfortunate misunderstanding

Although the US has not officially imposed sanctions against Ukraine, these sanctions are practically in effect. About 1 million Ukrainians living in the Zaporozhye and Donetsk regions controlled by the Ukrainian government cannot use international payment systems: SWIFT, Western Union, Monigram, RIA. But the services of the Ukrainian banking system are available to these people. This situation covers an area of 8,500 square miles, which is comparable in size with the State of New Jersey.

The problem arose at the end of 2022, when the EU adopted the 8th package of sanctions against Russia. The Ukrainian press wrote about this. ⁽¹⁾ Sanctions operate on a territorial basis. People registered in the Ukrainian part of the Donetsk and Zaporozhye regions cannot use international payment systems anywhere. For example, if a citizen of Ukraine registered in the city of Kramatorsk, Donetsk region, comes to the city of Lviv, Lviv region, then he will not be able to use international payment systems. The address in the passport has become a curse for many people!

However, even by May 2024 the problem was not resolved. The author of these lines was unable to receive his fee from the USA for the article published in the American magazine OFFGRID Issue #61. This happened 09/05/24. My SWIFT payment was not processed by the system. Mary Mendence accountant CMG West LLC, the company that made the payment, told me: "It has to do with your location and sending money to your region. It is not allowed by OFAC." ⁽²⁾ The payment was blocked by Wells Fargo Bank, which acted in accordance with OFAC instructions. The bank employees did not ask me for any information. They simply blocked the payment.

I am a citizen of Ukraine and live in the city of Kramatorsk, Donetsk region. This city is the administrative center of that part of the Donetsk region that is controlled by the Ukrainian government. Since the first day of the war, I have been reporting about my life in the war for the American newspaper Red Hook Daily Catch. ⁽³⁾ For this work, I was nominated for the 2023 Pulitzer Prize in the category "Best Foreign Reporting." After such a background, finding yourself under American sanctions seems unthinkable. But it happened!

Correspondence with OFAC

Trying to understand the situation, I contacted OFAC. This is the correspondence. ⁽⁴⁾

My letter:

"Hello. My name is Pavel Kulyuk, I am a Ukrainian journalist and Pulitzer Prize nominee. I have Ukrainian citizenship. I live in the city of Kramatorsk Donetsk region of Ukraine. This territory is controlled by the Ukrainian government.

"For me, on 09/05/24, CMG West LLC sent a SWIFT payment in the amount of $... The payment was made through Wells Fargo Bank. As reported Mary Mendence accountant CMG West LLC this payment was blocked at the direction of OFAC. What's happening? OFAC blocks sending SWIFT to Ukrainian citizens who live in territory controlled by the Ukrainian government? Why? It's like sanctions that don't work well. I hope to receive your answer to what is happening. I am ready to provide any documents you are interested in. With respect and sincerity, Pavel."

OFAC Response:

"Thank you for your email. OFAC does not stop, seize, or hold funds. Financial institutions stop to investigate and release, reject, or block transactions or accounts pursuant to U.S. sanctions regulations.

"If the name or identifying information of a party to your transaction is similar to that of an individual or entity on OFAC's SDN List or other sanctioned jurisdiction or activity, please be prepared to provide your financial institution with additional information to support your claim that the person involved in your activities is not the blocked individual or entity listed on one of OFAC's sanctions list or that the activity is not prohibited by OFAC sanctions.

"If the transaction has not been blocked yet, the financial institution may be undertaking an internal investigation to determine the full details of the transaction. The only insight available during the financial institution's review would be from the financial institution directly; OFAC does not have insight into the internal investigation by the institution. Please be advised that, in the course of investigating a potential sanctions nexus, a bank may request additional details from its customer, as part of the bank's operations. This is not a request from OFAC. If a bank is unable to clarify a potential sanctions nexus, they may be unwilling or unable to process the funds forward."

Correspondence with Wells Fargo Bank

After receiving OFAC's response, there was no point in contacting this government agency. So I turned to Wells Fargo Bank. The appeal was made through Facebook Messenger recommended for contact on a special page of the Wells Fargo Bank website.⁽⁵⁾ A bank employee who introduced himself as Richard spoke to me. This was at 3:05PM on May 28, 2024. ⁽⁶⁾

Here is this short dialogue:

Pavel Kulyuk: "Hello. My name is Kuluk Pavel. I am an American-Ukrainian journalist and Pulitzer Prize nominee. On 05/09/24 CMG West LLC sent me a SWIFT payment in the amount of $... But the payment was blocked. As the company accountant said, this was done because: "It has to do with your location and sending money to your region." I am a Ukrainian citizen and live in the city of Kramatorsk, Donetsk region. This city is controlled by the Ukrainian government. Who can I discuss my problem with? I am ready to provide any documents to unblock my payment."

Richard: "I understand the importance of your transaction, Pavlo. If you are an account holder, please call us at 1-800-869-3557 or at the appropriate toll-free number for your location https://on.wf.com/6180eTn7q

"If a traditional phone call is not an option, you can consider using VoIP (Voice over Internet Protocol) or 'Internet calling' through Google Voice, Viber, and Skype to call 1-800-956-4442.

"Otherwise, please continue working with the sending party and your financial institution to explore your options.-Richard."

Pavel Kulyuk: "Richard, thank you very much for your answer. I am not an 'account holder'. Does this mean that the only way to find out the situation is to work with "with the sending party and your financial institution"? Is there anything you can do to help me?"

Richard: "Unfortunately, we are unable to assist you with this concern as we are unable to discuss account specific transactions with you or through this channel. If the sender is a Wells Fargo account holder, they can contact us for assistance in the same manner that you may contact your bank for more insight about this. -Richard".

Pavel Kulyuk: "Thank you very much Richard. Have a good day!"

As we see, in the absence of an account, the bank refuses to contact regarding payments. And all my hope is the accountant of the company that sent me the payment. But the accountant sent me back to where I had just come from. Those places were OFAC and Wells Fargo Bank. Now is the time to smile :)

A short Internet correspondence makes it possible to understand how 1 million Ukrainian citizens in the territory controlled by Ukraine found themselves under US sanctions.

Conclusions

When imposing sanctions, OFAC relies on the integrity of banks, which must work as needed and correctly. But in reality, it is not profitable for banks to check and clarify each payment, risking penalties for violating sanctions in case of an error. The profit from making these payments is less than the possible fines.

Therefore, in the case of sanctions, banks believe that doing "too much" is better than "too little." As a result, banks do not divide the Donetsk and Zaporozhye regions into Ukrainian and Russian parts. Banks are cutting off services to the entire region! Nothing personal just business!

In fact, Ukrainians are not victims of sanctions. Ukrainians have become victims of large capital, which has specific views on life. Knowing this, do not ask against whom the next sanctions were imposed. Maybe these sanctions were imposed against you!

Check List

1) fin.com.ua/2022/11/09/95313447/

2) Screenshots of correspondence can be provided upon request from editorial staff

3) .thedailycatch.org/category/ukraine/pavels-war/

4) Screenshots of correspondence can be provided upon request from editorial staff

5) .wellsfargo.com/help/contact-us/

6) Screenshots of correspondence can be provided upon request from editorial staff

Authors Bio:

I have been living as a journalist for 15 years. Nominee for the 2023 Pulzer Prize (category "Best Foreign Reporting." Red Hook Daily Catch) Regularly published in the United States, Australia and Canada.
I write on socio-political topics and agriculture. I defend the political rights of people with disabilities in the USA (I write articles about this for free).