Sanctions Seminar Summary and Key Takeaways

Since 2022, the global sanctions landscape has changed dramatically, with the US, UK, and EU expanding and refining their programs in response to geopolitical events, particularly Russia’s actions and tensions with Iran. Regulators such as OFAC, OFSI, SECO and EU bodies are coordinating more closely and sharing information, but their policies don’t always align. For example, the EU and UK have continued adding new measures against Russia, while the US has focused more heavily on enforcing restrictions against Iran and other regions like Venezuela. This combination of coordination and divergence makes it harder for companies to operate internationally, as they must navigate overlapping rules and often follow the strictest set of requirements among them. As a result, businesses are under growing pressure to carry out deeper due diligence, continuously monitor transactions, and ensure contracts reflect up to date sanctions obligations in a number of jurisdictions, not just those they sit in.

A major theme discussed was the growing reach of sanctions and the way indirect exposure can create risk. The EU and UK have introduced wider restrictions on Russian oil, gas, and shipping, targeting vessels and intermediaries involved in “shadow fleets” that attempt to conceal the origin of Russian products. Similarly, the US has strengthened “secondary sanctions,” which allow it to penalise non US companies that do business with sanctioned parties, even if those companies operate entirely outside the US. These policies have broad implications for supply chains, shipping, and financial transactions, making it essential for businesses to look upstream to detect any hidden connections to sanctioned entities. Many companies are also finding that long-standing trading relationships are becoming difficult to maintain, as banks and insurers increasingly apply internal policies that are stricter than legal requirements. This heightened caution reflects the severe financial and criminal penalties that can be imposed on both individuals and organisations for breaches, even when unintended.

Speakers also noted that funds and corporates need stronger systems to manage these risks. Investment funds are tightening investor screening and documentation, especially in response to stricter anti-money laundering and KYC rules in jurisdictions like Singapore. Traditional contracts and joint ventures are, therefore, being restructured to include flexible clauses that can adapt as sanctions regimes change. A further area of focus was the concept of ownership and control, where a business can be treated as sanctioned if a sanctioned person owns or effectively influences it, even without formal majority ownership. Overall, the clear message was that effective compliance now demands continuous monitoring, detailed record-keeping, and strong internal governance. To safeguard access to financing, trade, and investment, businesses must go beyond legal compliance and align their practices with the increasingly cautious standards of their banks and commercial partners.