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What are sanctions?

Sanctions represent a commonly-used tool by governments and regions around the world to restrict the ability of perceived rogue nation states, (commercial/governmental/charitable) entities or persons to conduct transactions on a global basis.

Involvement in transactions with sanctioned counterparties at any level can mean enforcement measures apply to non-sanctioned entities or individuals andis a risk that remains largely under-estimated. This can lead to costly mistakes, as the US in particular has used punitive enforcement tools to great effect, issuing huge monetary penalties and imposing major restrictions.

It is therefore paramount to take a pre-emptive approach in jurisdictions subject to major punitive enforcement actions driven by tough economic sanctions. This means recognising that some economic sanctions are far more aggressive in terms of enforcement than others.

It is also critical to understand that influential global bodies dictate that anti-money laundering and counter-terrorist financing measures are part and parcel of the overall sanctions policy toolkit. The strictest sanctions enforcers require little in the way of proof and can issue substantial penalties based merely on apparent sanctions violations, including suspected money laundering and terrorist financing.

A proactive, pre-emptive, pragmatic and results-oriented approach to sanctions is therefore essential.

Cross-Border Sanctions & AML

The ultimate legal and economic guide to Sanctions and Anti-Money Laundering.

The post-9/11, post-Global Financial Crisis world has seen a marked increase in the presence and role of the US as extra-territorial, cross-border enforcer of global stature. Critically, this US policy dominance has harnessed the weaponisation of the pre-eminent US dollar and access to the world’s largest economy as leverage and suasion when enforcing its policy goals.

Set against a world of increasing global transactions, in a backdrop of heightened geo-political complexity and cross-border trade tension, and widespread international financial crime, the US has established itself as the global enforcer to be reckoned with. Iain Stewart unveils the way that this has been achieved, in stark contrast to the comparatively ineffective efforts of the EU and UN, from a sanctions and anti-money laundering perspective.

“…Sanctions violations accounted for a
significant 56% of all fines (2008-18)…”

Geo-Financial Risk, US$ Dominance,
Extra-Territoriality

“…A study found that although the US only accounted for 44% of all global AML, KYC and sanctions fines (2008-18), yet US penalties amounted to an astonishing 91% of the total value of all fines, at $23.52bn…”

“…A mixture of foolhardiness, crass ignorance and above all irresponsible naivety have led a bunch of commercial entities in otherwise highly ranked jurisdictions to pretend that no-one was looking and deny the existence of major extra-territorial
powers from the likes of the US…”

Legislation, Cases and Fines

Legislation

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Settlements and fines

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““….It would be incorrect to exaggerate the impact of one single nation state in being more ready to see through enforcement than, say, globally-mandated bodies or regionally coordinated unified representative bodies. The UN and the EU have themselves proved entirely successful at certain moments of coordinated and effective strategies of curtailing perceived illicit behaviour by rogue actors.

Indeed, the coordinated way that global bodies, in concert with major economic powers as represented in the G7 and other global body derivations, offered a similar approach and set of standards, has enabled the apparent success of one nation state – the United States – in being able to seize and freeze assets, impose fines upon nation states, commercial entities and individuals deemed to be rogue – to the tune of billions of US dollars in terms of peak size….””

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