Export control and financial sanctions
Export control and financial sanctions are used by the international community to counter terrorism, the proliferation of WMD and restrict the activity of unstable and potentially threatening regimes.
Companies that trade internationally need to be aware that their products may require export licences or that their trading partners could be the subject of international sanctions, making the trade prohibited.
Failure to comply with the export control or financial sanctions regime is taken very seriously by the authorities and they are backed up by the courts having severe criminal and civil penalties at their disposal including significant fines and terms of imprisonment.
The EU and UK regulations, which make up the export control and financial sanctions regimes are often very complicated and can evolve quickly meaning that it can be very difficult for a business to remain fully compliant all of the time.
We regularly advise companies on their international trading responsibilities, providing advice on the implications of international law to their business, including:
- Advising on whether their products and the entities they trade with are subject to and/or are prohibited under international sanctions.
- Advising on export control requirements; assessing whether a product falls under one of the controlled goods lists; and providing practical assistance to secure the necessary export licences.
- Appraisals of financial trades and whether these require obtaining financial authorisation and providing assistance in securing these.
- Advising on the practical difficulties caused by major banks taking a 'best practice' approach to receiving funds originating in countries subject to EU or U.S. sanctions and providing practical solutions to this.
- In the event of a possible breach providing full representation throughout the criminal investigation and any potential prosecution.
Recent work highlights:
- Advising a leading global chemical company with manufacturing sites in Europe, Middle East, South Africa, Canada, India and South America on its sales of polymer resin coated products to the Iranian oil industry. We assessed the implications of internal trading law on the contractual arrangements in existence; we advised on the financial authorisation regime in place liaising with HMRC and the Chief Minister's Department, Jersey regarding historic trading; and we provided practical solutions going forward for obtaining the necessary approvals and trading in full compliance.
- Advising a plc that provides energy consulting software and services to energy refineries around the globe on its existing contracts with oil and gas refineries in Iran and Sudan. This required a full appraisal of the current legal implications of the trading relationships and the contracts in place. We provided a practical solution for ending those contracts and the practical recovery of the outstanding funds in light of the client's main banks refusing to accept funds originating in countries subject to sanctions.
- Providing continuing export advice to a manufacturer of dual-use items on its requirements to obtain export control licences for products and its trading with entities in the EU and U.S.
- Advising a food importer on its imports from Iran. In this case the client's banks were not willing to accept funds originating from an Iranian entity despite not being subject to international sanctions. We provided practical advice on the most efficient way for the client to continue to trade and receive those funds.