Bass, Berry & Sims attorney Thad McBride discussed how the United States uses “secondary sanctions” to enforce U.S. sanctions and embargoes against non-U.S. parties. Under secondary sanctions, the U.S. government restricts U.S. companies and individuals from conducting business with non-U.S. companies and individuals because of those parties’ affiliation with a sanctioned business or person.
As Thad explained, “[Secondary sanctions] are an example of U.S. extraterritorial jurisdiction at its most extreme. Even if there is no U.S. actor, no goods or parts of U.S. origin, no direct connection whatsoever, the U.S. wants to nevertheless strongly discourage non-U.S. companies from doing business with [sanctioned entities] by, for example, restricting their access to the U.S. market.”
“Failure to understand how far U.S. jurisdiction extends can lead to very significant penalties,” Thad cautioned.
The full article, “The Long Arm of United States Sanctions Law Reaches Around the Globe,” was published by the Society of Corporate Compliance and Ethics and is available online.