Bass, Berry & Sims attorney Thad McBride authored an article for Corporate Counsel outlining updates related to the United States’ economic sanctions and embargoes honing in on some of the most significant areas to watch in the current climate, including the Russia-Ukraine developments China and Iran. The article also forecasts potential updates to watch and offers best practices for compliance in this difficult-to-predict area for businesses operating internationally.
“Any U.S. company that conducts business internationally, from the proverbial widget manufacturer to the most sophisticated technology company, needs to recognize that they are subject to U.S. sanctions jurisdiction,” Thad said. “Many non-U.S. companies are also subject to U.S. sanctions jurisdiction if they employ U.S. persons, sell or deal in U.S.-origin goods, and even in some cases when transacting U.S. dollars.”
While each area of international relations can evolve by the day, businesses can take steps to improve their compliance profile, such as:
- Given the breadth of sanctions enforcement activity, it is essential to screen transaction parties against the applicable U.S. government prohibited and restricted parties list.
- Understand the importance of diligence when pursuing business in China or Russia as the U.S. government does not prohibit business with either country – as opposed to potential business in Iran when the answer is almost always a straight “no.”
- Implement clear policies so that personnel understand the obligation to appropriately review international transactions and transaction partners.
- Allow room for policies to adapt to sudden changes in sanctions, and open a clear line of communication so personnel is made aware of changes on a timely basis.
- Utilize resources from the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) to help develop and implement sanctions compliance measures (see here).
The full article, “U.S. Sanctions: Looking Ahead, Compliance Best Practices,” was published by Corporate Counsel on February 22 and is available online (subscription required).
This article references the developing situation between Russia and Ukraine. Thad and the team are monitoring the developments in this area and will be providing ongoing coverage on the GovCon & Trade blog. Please check the blog for updates and contact Thad or the team for any questions related to trade issues between Russia and Ukraine or elsewhere.