Sanctions Law

Sanctions are a legal instrument used by the international community to influence states and their residents that refuse to comply with their international obligations. Countries impose bans on certain economic activities involving sanctioned individuals and states.

Types of Sanctions

Individual sanctions - imposed against specific persons;
Sectoral sanctions - target specific sectors of the economy;
Comprehensive (global) sanctions - prohibit economic interaction with an entire country.

Another way to classify sanctions is to divide them into temporary and permanent (those that remain in force until formally lifted).
Sanctions are used to address a broad range of international issues, including exerting influence or prompting policy change in the targeted country.

Sanctions may be imposed by any state based on its national legislation. Restrictions can also be introduced by supranational and international organizations within their scope of competence.
It is important to note a key nuance: the greater the economic ties a sanctioned country had with the sanctioning states, the stronger the impact of such sanctions will be.

Amid global changes in sanctions legislation, businesses are facing new challenges. The latest package of restrictions from Western countries has resulted in a freeze on technology exports. The EU has also expanded its sanctions list, introducing new measures in response to “hybrid threats,” such as interference in democratic processes, cyberattacks, and disinformation. These developments present additional risks for international business activities.
International businesses engaged in supply chains of equipment and industry continue to experience growing turbulence and uncertainty in their operations.

Supply chains, international payments, beneficial ownership—these and other factors may create difficulties in routine operations, opening bank accounts, and dealing with regulators and counterparties.

At the same time, many entrepreneurs—seeking to emphasize their lawfulness—apply sanctions overly broadly and without justification, thereby violating the rights and interests of non-sanctioned persons and businesses. This, too, entails significant legal risks.

Law&Trust Services

Navigating between extremes—without violating the law through negligence or overreach, and still generating profit—is a challenge that demands the highest level of expertise from business officers.

In-house legal teams often fall short when faced with such tasks, typically sacrificing profitability for excessive caution. This is largely due to a limited perspective and lack of practical experience with the real-world application of sanctions measures. As a result, they tend to avoid any risk altogether, rather than properly assess and manage it.

Law & Trust International has extensive experience in resolving these issues, and we are ready to assist our clients.

From developing sanctions compliance strategies to minimizing legal risks, we offer professional legal assistance in sanctions law to both businesses and individuals.

We have experience both in designing compliance strategies and in defending rights violated by sanctions.

F.A.Q.

What are the legal consequences of being sanctioned?

Asset freezes;
Restricted access to banking systems (e.g., SWIFT);
Prohibition on conducting business with residents of the sanctioning country;
Suspension of supply chains or service delivery;
Reputational damage.

What are secondary sanctions?

Secondary sanctions are measures applied to third parties (including foreign ones) if they cooperate with entities under sanctions. For instance, the U.S. may impose sanctions on a European company that conducts business with Iranian or Russian entities listed on the SDN List.

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