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.