Economic sanctions are driven by, and are increasingly important tools of, geopolitical strategy. They can and do affect businesses of all shapes and sizes, wherever they operate in the world.
The use of economic sanctions has grown over the past several years, particularly in relation to Russia, Iran, Syria, Venezuela and North Korea. Each sanctions program requires careful review on its own terms. Broadly, however, sanctions can restrict or prohibit: the provision of financial services or access to capital markets; the trading of certain products or commodities from target countries; the provision of certain services to specific identified target individuals, groups or regimes.
The United States government has been, and remains, a particularly active enforcer of its sanctions laws. In light of Russian military activity in Ukraine, and the civil war in Syria, the European Union introduced wide-ranging sanctions programs. Most recently, British authorities have increased their focus in this area, and begun to pursue companies for relevant breaches. Relatively recent changes to UK practice introduced a mandatory disclosure obligation for professional firms, which compels them to disclose sanctions offences.
As geopolitical tensions unfortunately increase around the world, businesses can expect economic sanctions to remain a relevant issue for the years ahead.