Sanctions, AML & KYC

Russia-origin fertilizer and grain trade is fully lawful for Kenyan import. The Russia sanctions regime imposed since 24 February 2022 by the United States (OFAC), the United Kingdom (OFSI), the European Union and aligned jurisdictions contains explicit humanitarian carve-outs for food, fertilizer and agricultural commodities — re-confirmed in every successive sanctions package through 2025.

The carve-outs are not interpretive. They are codified.

OFAC — General License No. 6

OFAC General License No. 6 (issued 24 February 2022; revised through 2024 to current iteration GL 6D (June 2024)) authorises "all transactions ordinarily incident and necessary to the production, manufacturing, sale, transport, or provision of agricultural commodities, agricultural equipment, medicine, medical devices, replacement parts and components for medical devices, or software updates for medical devices" involving the Russian Federation.

"Agricultural commodities" includes:

• Fertilizer — ammonia, urea, potash, phosphates, NPK, ammonium nitrate, calcium nitrate
• Grain — wheat, maize, rice, barley, oats, soybeans, peas
• Oilseeds and oils — sunflower seed, sunflower oil, rapeseed, rapeseed oil
• Dairy — dry milk, cream, butter
• Meat, sugar, and inputs to agricultural production

Source: US Treasury Office of Foreign Assets Control, Russia-related sanctions page; OFAC Food Security Fact Sheet.

OFSI — Agricultural Carve-Outs

The UK regime (the Russia (Sanctions) (EU Exit) Regulations 2019 as amended) operates an equivalent agricultural exemption.

• General Licence INT/2022/1710676 and successors — humanitarian and agricultural transactions exemptions
• Specific licensing route through OFSI for transactions touching restricted Russian banks. Rosselkhozbank sits on the OFAC EO 14024 Directive 3 (NS-MBS) sectoral list since 24 February 2022 (effective 26 March 2022) — restricting new debt and equity over 14 days maturity, not full asset-freeze. Use of Rosselkhozbank in agricultural-commodity payment chains remains subject to per-cargo bank sanctions-desk approval; routing around Rosselkhozbank remains the recommended posture.

EU — Council Regulation 833/2014 (food-security carve-outs)

EU Council Regulation (EU) No. 833/2014 (consolidated through successive sanctions packages 2022–2025) preserves agricultural and food-security carve-outs through:

• The regulation's recital and Article 12b derogations on food security
• Article 5aa carve-out for transactions necessary for the purchase, import or transport of agricultural and food products, including wheat and fertilizers, between third countries and the Union, or to a third country (refer to the consolidated Regulation 833/2014 as amended through the 19th and 20th sanctions packages 2025–2026)
• Article 12b — wind-down/divestment derogation framework, including a competent-authority pathway for transactions necessary for the supply of agricultural and food products to third countries
• Annex XXI exclusions

(Article 11 is the regulation's no-claims clause and is not the food-security carve-out — that citation is a common drafting error.)

The EU's successive sanctions packages have tightened restrictions on Russian LNG, oil products and re-export pathways while maintaining the food / fertilizer carve-outs.

EU customs duties on Russian fertilizer (introduced May 2025) apply to Russian fertilizer imported into the EU — they do not apply to Russian fertilizer transiting EU ports for delivery to non-EU destinations (Kenya included).

Belarus

The exclusion is producer-entity-specific, not country-level. Belarusian DAP, sawn timber, plywood and dairy producers are not subject to entity-level sanctions; Sarpah introduces buyers to those flows on standard counterparty-screening terms. The producer-entity exclusion is narrowly scoped to potash:

JSC Belaruskali, JSC Belarusian Potash Company (BPC) and Agrorozkvit were formally removed from the OFAC SDN List on 26 March 2026 (OFAC GL 14 issued; OFAC archived GL 13; Directive 1 under EO 14038 rescinded). UK OFSI asset-freeze under the UK Belarus Regulations 2019 and EU asset-freeze under Council Regulation 765/2006 Annex V remain in force. EUR/GBP correspondent legs continue to touch UK and EU asset-freeze regardless of routing. Sarpah does not introduce buyers to Belaruskali or BPC pending UK and EU resolution. East African MOP demand is met through introductions to non-designated Russian producers (Uralkali, EuroChem) with disclosed beneficial ownership and bankable correspondent chains.

Lithuania terminated Klaipeda transit for Belaruskali in February 2022; Russian Baltic loadout via Ust-Luga is the operating routing for non-designated producers.

What This Means Operationally

Fertilizer and grain are not sanctioned. Corridor cargoes from Russia, Kazakhstan and Uzbekistan with non-designated counterparties are fully lawful, fully bankable and fully insurable.

The operating constraint is counterparty-specific, not commodity-specific.

Designated banks

Designated Russian banks cannot receive USD / EUR / GBP correspondent banking. The list as of 2026 includes: Sberbank (OFAC SDN 6 April 2022), VTB (OFAC SDN 24 February 2022), Gazprombank (sectoral until 21 November 2024; full SDN thereafter), Otkritie Bank (OFAC SDN 24 February 2022), Sovcombank (OFAC SDN 24 February 2022), Promsvyazbank (OFAC SDN 22 February 2022), Novikombank (OFAC SDN 24 February 2022), VEB.RF (OFAC SDN 24 February 2022), Alfa-Bank (OFAC SDN 6 April 2022), Tinkoff / T-Bank (TCS Group, OFAC SDN 20 July 2023) and Credit Bank of Moscow / MKB (OFAC SDN under EO 14024, 24 February 2023). Rosselkhozbank sits separately on OFAC EO 14024 Directive 3 (NS-MBS sectoral) since 24 February 2022 effective 26 March 2022 — restricting new debt and equity over 14 days maturity rather than full asset-freeze; agricultural-commodity payment chains routing through Rosselkhozbank remain subject to per-cargo sanctions-desk approval, with routing around Rosselkhozbank as the recommended posture.

Payments must route through a non-designated bank. The European-prime confirming-bank universe for Russia-touching trade finance has narrowed to substantially nil for new business through 2022–2026. Operational corridors in 2026:

• AED settlement via Dubai correspondents — Mashreq, Emirates NBD — the operationally dominant Russia–Africa channel; per-cargo appetite at the buyer's bank's group sanctions office
• CNY settlement via CIPS direct participants — China's cross-border interbank payment system. Standard Bank of South Africa joined as a direct participant in June 2025 alongside Afreximbank; Bank of China and ICBC are long-standing participants; Ecobank is enabling direct yuan from 2026. CIPS is the structural rail for non-USD East-Africa-China settlement
• Hong Kong / Singapore correspondent routing for Asian-domiciled buyers
• European primes — Commerzbank Frankfurt stopped new Russia business in 2022 and re-confirmed in March 2025 it will continue the exit even after a ceasefire; Raiffeisen Bank International (Vienna) is in active wind-down under ECB SREP measures (ECB ordered RBI to cut Russian loan book by 65% by 2026; sale to local buyer blocked October 2025); the European-prime route is case-by-case for legacy mandates only and is not a primary route for new East African Russia-touching cargoes

Designated individuals

Designated individuals cannot benefit from any transaction. Sarpah's KYC screens every counterparty against:

• OFAC SDN (Specially Designated Nationals)
• OFSI Consolidated List
• EU CFSP (Common Foreign and Security Policy) sanctions list
• UN Security Council Sanctions Lists
• Kenya FRC POCAMLA register

Producer-entity vs beneficial-owner asymmetry

Russian fertilizer producers are not sanctioned at the producer-entity level: PhosAgro, Acron, EuroChem, Uralkali, Uralchem, KuibyshevAzot. Several have UBOs that are designated, requiring per-cargo cap-table evidence below the 50% OFAC blocking threshold and disclosure at SPA stage:

• Dmitry Mazepin (Uralchem / Uralkali) — OFAC SDN designated 8 April 2022 under EO 14024; UK OFSI; EU CFSP
• Andrey Melnichenko (EuroChem) — UK OFSI March 2022; EU CFSP. The August 2025 English High Court decision in EuroChem v Société Générale found Melnichenko remained beneficial owner of the Firstline Trust holding EuroChem AG, even though EuroChem AG itself is not directly listed by OFAC, UK or EU. Per-cargo legal-opinion evidence on the ownership-and-control test is required from buyer-side counsel for all EuroChem flows touching GBP or EUR correspondent banking
• Andrey Guryev (PhosAgro) — UK OFSI March 2022; EU CFSP
• Vyacheslav Kantor (Acron) — UK OFSI in force; UK varied entry 17 March 2026 reflecting his Acron Coordinating Board chairmanship. EU CFSP designation removed March 2025. Acron cargoes through GBP and UK chains remain blocked; EU and EUR chains have re-opened subject to per-cargo BO confirmation
• Togliattiazot — Russia decree 302 nationalisation 2022; corporate-status review required per cargo

Beneficial-owner certification is conducted on every cargo at SPA stage. The OFAC 50% blocking rule applies to US flows; the UK and EU operate ownership-and-control tests that may reach further (as the EuroChem v Société Générale 2025 ruling demonstrates). Cap-table evidence is reviewed against all three regimes. Where a producer's UBO position cannot be evidenced below the OFAC threshold or cannot satisfy the UK/EU ownership-and-control test for the relevant currency leg, the cargo is restructured to alternative origin or alternative producer.

Maritime Insurance and Vessel Screening

Russian-origin oil under price-cap rules (December 2022 G-7) requires attestation by the trader at every transit stage. Petcoke is technically distinct from "petroleum products" under the price-cap regulations.

For agricultural commodities (fertilizer, grain, oils, dairy, sugar), no price-cap or attestation regime applies — the agricultural carve-outs are explicit. P&I clubs (Britannia, Gard, North Standard, Skuld, Steamship Mutual, UK Club, West) require sanctions clauses on every Russian-origin cargo, and the carrying vessel must be cleared on every cargo against:

• OFAC SDN vessel list
• UK Russia Sanctions Regulations Schedule 6 (designated vessels and beneficial owners)
• EU shipping ban Annex XLII (specified vessels)
• G-7 Price Cap Coalition shadow-fleet alerts (current advisories)

Non-IG cover (RNRC and other non-International-Group P&I clubs covering Russian-flagged or Russia-touching tonnage) is not accepted under the SPA insurance article — coverage must be IG with 110% CIF per UCP 600 Article 28.

The vessel screen is run at fixture and re-run before sailing; a vessel added to any of the above lists between fixture and sailing is replaced.

Kenya FRC — POCAMLA

The Financial Reporting Centre (FRC) is established under the Proceeds of Crime and Anti-Money Laundering Act, No. 9 of 2009 (POCAMLA), as amended through the Anti-Money Laundering and Combating of Terrorism Financing and Proliferation Financing (Amendment) Act 2025 (assented 14 June 2025). The 2025 Amendment Act tightened penalties, expanded the reporting-institution scope to cover DNFBPs more comprehensively post-FATF grey-listing, and strengthened beneficial-ownership disclosure obligations. FRC is the Kenyan Financial Intelligence Unit and Kenya's representative to the Egmont Group.

Reporting obligations on banks and reporting institutions (which include licensed importers above thresholds):

• Suspicious Transaction Reports (STR) — file within 7 working days
• Cash Transaction Reports (CTR) — for transactions ≥ USD 15,000 (KES equivalent)
• Cross-Border Currency Reports — currency moved across borders

For commodity importers, every LC, MT103, SBLC and large RTGS settlement is screened by the issuing bank's AML monitoring against POCAMLA, the Prevention of Terrorism Act 2012, and the Proceeds of Crime and Anti-Money Laundering Regulations 2023.

CBK Guidance

CBK regulates banks under the Banking Act, Cap 488 and the Central Bank of Kenya Act, Cap 491. CBK has issued no directive prohibiting Russia-origin trade finance. The operating constraint is secondary sanctions exposure of Kenyan banks to OFAC — fear of losing USD correspondent access — not Kenyan domestic prohibition.

CBK Prudential Guidelines:

• CBK/PG/04 Capital Adequacy — trade finance is risk-weighted under Basel III
• CBK/PG/08 Foreign Exchange Exposure Limits — banks' net open positions limited to 10% of core capital
• CBK/PG/03 Risk Management
• CBK Guidance Note on AML/CFT (2018, revised 2023)
• CBK Risk-Based Supervisory Framework

Kenyan Banks — Russia-Origin Posture (2025–2026)

Kenya–Russia Intergovernmental

Kenya does not impose autonomous sanctions on Russia. Kenya votes at the UN General Assembly with Western alignment on territorial-integrity language but has not enacted sanctions legislation against Russia. CBK has not issued any directive prohibiting Russia-origin trade finance.

How Sarpah Operates the Sanctions Discipline

• Counterparty screening at onboarding, pre-shipment and pre-payment against OFAC SDN, OFSI Consolidated, EU CFSP, UN Security Council Sanctions and the Kenya FRC POCAMLA register
• Beneficial-ownership review on every Russian / CIS producer allocation, with cap-table evidence below the 50% OFAC blocking threshold at SPA stage
• Vessel screening at fixture and re-screening before sailing against OFAC SDN, UK Schedule 6, EU Annex XLII and shadow-fleet advisories
• Designated-bank routing avoidance, with payment-chain transparency at SPA stage
• KYC documentation maintained for the buyer's bank's pre-payment file and for KRA Post-Clearance Audit (TFA Article 7.5)

We introduce buyers only to upstream originators who can stand up to the screen. Where producer UBO disclosure cannot be evidenced below the OFAC blocking threshold, or where the payment chain cannot avoid designated banks, the introduction does not proceed.