A recommendation on how companies may think about how they work with and manage sanctions. How they assess risk and create processes.
This guidance is in support of small and medium size enterprises that does not have any compliance routines since before. It applies to the company’s business opportunities or activities with parties, countries or territories associated with a sanction from the United Nations (UN), the European Union (EU), the UK, the Organisation for Security and Cooperation in Europe (OSCE), country specific embargoes or other bi- or multilateral sanctions. Export controls are managed separately and applicable export control authorities are highly likely to deny at least all military export authorisations for business opportunities relating to sanctioned parties and parties in sanctioned countries or territories. If there is any doubt, seek legal advice.
For the purpose of identifying sanctioned parties all external parties to all ongoing business transactions where the company is involved should be both initially and continuously screened against applicable sanction lists. All personnel directly involved in business with third parties need to be aware of which countries the parties in their transactions comes from, or are established in, as well as if those countries or territories are under some kind of embargo.
A general advise is that the company does not initiate, pursue or otherwise get involved in either direct or indirect business with sanctioned parties or parties in sanctioned countries or territories. However, note that there are many different kinds of sanctions, where some are blocking which implicates a total freeze of all funds for the sanctioned party, while others only target specific industry sectors, so called sectoral sanctions. If a party is subject to sectoral sanctions, this does not necessarily mean that every transaction is prohibited. Thus, provided that all the relevant conditions and restrictions are met, sectoral sanctions do not hinder continued business. Moreover, the numerous country specific sanctions are only applicable if the transaction has a connection to the country in question.