GLOBAL ECONOMIC SANCTIONS REGIMES: IMPLICATIONS FOR MULTINATIONAL COMPANIES
As economic sanctions regimes globally continue to expand, diverge and increasingly come into conflict, it is more important than ever for multinational companies to stay abreast of and manage relevant sanctions laws and risks. This article provides a high-level overview of prominent sanctions regimes – those of the US, European Union (EU), the UK and China – and highlights key risks and recent developments for companies to consider in mitigating risks across these regimes.
Overview of prominent sanctions regimes
While US and EU economic sanctions have historically dominated the sanctions compliance landscape, new sanctions regimes in the UK and China have emerged over the past year and will continue to develop in the years to come.
US economic sanctions are primarily administered by the US Department of the Treasury’s Office of Foreign Assets Control (OFAC), which administers a number of sanctions programmes regulating and, in some cases, restricting transactions undertaken within US jurisdiction. US sanctions apply to US companies, as well as non-US companies to the extent they engage in a transaction involving a US nexus (including any US persons or US dollar payments, which are virtually all processed through the US).
OFAC’s primary sanctions programmes broadly fall within three general categories. First, list-based sanctions prohibit or restrict dealings with designated individuals or entities associated with a particular regime or activity (as well as entities 50 percent or more owned, directly or indirectly, by one or more sanctioned persons). Second, comprehensive sanctions prohibit virtually all dealings with individuals or entities located, organised or resident in a particular country or territory (presently, Crimea, Cuba, Iran, North Korea and Syria).
Jan-Mar 2022 issue
Cleary Gottlieb Steen & Hamilton LLP