For multinationals, one major and pressing challenge is compliance with sanctions regulations across various jurisdictions in which they do business. Sanctions change globally all the time. Companies need to be aware of hundreds of sanctions lists worldwide and these lists are frequently updated. During the Trump administration, for example, the US government made a record 3900 sanctions designations, including the sanctions against Iran. Pressure on companies has intensified due to international political backlash in relation to Russia’s invasion of Ukraine. As sanctions regulations become more complex, organisations must anticipate situations and be prepared to respond quickly to new challenges and legal requirements. Businesses need to be aware of new and expected sanctions, requirements and best practices.
The most visible and significant developments in sanctions in recent times have been related to Russia’s war of aggression into Ukraine.
The most visible and significant developments in sanctions in recent times have been related to Russia’s war of aggression into Ukraine. Britain and the European Union (EU) have led the way on sanctions. So far, many of the sanctions aimed at Russia have targeted high-profile and high-net-worth individuals. They include chief executives and political figures of Russia’s state-owned enterprises, including President Vladimir Putin. The sanctions have additionally targeted Russian banks, shipbuilding companies, road transport companies and machinery manufacturing sectors. Regional embargoes and bans on transactions, exports and the provision of related services have been imposed.
It is good to intensify inspection and control.
It is good to intensify inspection and control. When conducting business, companies must take into account the increased commercial, financial and reputational risks of Russian companies and named persons. In addition, it should be remembered that global sanctions enforcement systems have become more stringent.
Companies should determine the shareholdings of their customers or investors, allowing them to identify sanctioned parties. Companies could face serious penalties for doing business if there is something problematic in the chain of ownership. Companies would do well to reassess their compliance activities and due diligence measures. For example, if it is not possible to effectively manage dealings with contractors, suppliers and other third parties, it can pose significant risks for businesses.
Global sanctions are complex and diverse, so companies cannot take advantage of just one screening solution. Companies need to understand their own compliance objectives and obligations and implement various processes to achieve them. Careful consideration is needed in relation to internal sanctions enforcement and policy.
Due diligence plays an important role, particularly with regard to supply chain partners and counterparties, to ensure that the Company is not responsible for the actions of subsidiaries or third parties acting on its behalf. Companies can face civil or criminal liability for various activities. Such activities include foreign and domestic crimes against corruption, fraud, human rights violations and other commercial and economic crime.
In view of increased sanctions, increased enforcement actions and harsher penalties, it is imperative that companies take into account the requirements of their activities. enforcement actions and regulations have increased. Can compliance be cost-effective? Yes, it can.
You can approach this by doing a thorough risk analysis of the business. Management must also understand compliance better and those working on it need to explain what compliance requires and how its objectives can be achieved.
With NordCheck, the company manages compliance matters comprehensively.
With NordCheck, the company manages compliance matters comprehensively. The NordCheck Regulation & Policy Management solution handles, among other things, the documentation required by standards and helps identify and enforce requirements caused by regulations by determining the correct control points.