Sanctions & Trade Compliance
How the sanctions packages influence your company
The western world is responding to the war launched by Russia with tough sanctions. This includes sanctions aimed at persons and economic sectors. Furthermore, export bans have been put in place on dual-use goods, for various high-tech goods and for particular machines used in sectors such as aeronautics and aerospace, shipping and the oil industry. It is important to note that – beyond this – trading with Russia in and of itself has not yet been restricted by sanctions. As the USA has shown with its oil embargo, further restrictions cannot be ruled out, especially import bans. Therefore, companies that wish to continue delivering to Russia need to carefully assess whether business can still be done with the companies concerned and whether the goods and services concerned are subject to import or export bans.
German companies with a high level of energy imports are, in particular, being severely impacted by the imposition of sanctions and countersanctions. The situation will become more acute if additional sanctions relating to oil or even gas deliveries are put in place. The high energy costs would result in competitive distortions and thus in decreasing export levels.
Furthermore, in order to effectively limit Russia’s space for financial maneuvering, selected financial institutions have been cut off from international cash flows by locking them out of the SWIFT system.
Sanctions
- How can companies be certain as to whether business partners such as customers and suppliers are affected by sanctions? If this is the case, what measures are necessary?
- How can companies assess the permissibility of services offered by sanctioned business partners?
- How can companies keep up with continuously changing requirements?
- How can transactions be assessed in accordance with the rules?
- How should you settle outstanding (supplier) invoices from sanctioned business partners without violating the applicable laws?
Current challenges
Challenges
- Effects and applicability of sanctions
- Various countries and organizations are continuously expanding their sanctions
Sanctions reviews
- Complex ownership structures make it difficult to identify the participating parties correctly (50 percent rule of OFAC)
- Transactions for trade with Russia and Belarus must be reviewed
Sanctions compliance governance
- Sanctions compliance governance is an area of focus for the supervisory authorities
- Sanctions compliance management systems must be robust and the completeness, appropriateness and effectiveness of the associated control activities within internal control systems must be ensured in order to address current and new sanctions requirements
- Analyzing potential risk scenarios – both internal and external – in which security requirements and safeguards could be circumvented to the detriment of the company
How we can assist you
- Sanctions quick check for identifying how sanctions packages influence company organization, business activities and, in particular, the responsibilities of management and employees
- Ascertaining actual status and assessing existing safeguards and activities in order to determine risk-based optimization measures with consideration for market standards and the expectations of regulators
- Performing a (group-wide) compliance risk assessment or risk analysis for individual business segments, organizational units or foreign locations
- Implementation of a (group-wide) (US) sanctions compliance management system
- Quick processing of sanctions lists with the assistance of connected screening services in order to gain an immediate understanding of your risks in a constantly changing environment
- Analysis of contractual relationships with sanctioned business partners and quantification of the financial risk: value of business with sanctioned parties as at a specific date.
- Quick-win solutions for rapid further development of the compliance management system
- Legal categorization of the applicable sanctions and their legal consequences for company organization
- Risk assessments examining business transactions relating to Russia
- Preparing and conducting training and awareness-building measures
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