With the news of Russia’s invasion of Ukraine fresh in the memory, trade sanctions as a topic are back front-and-centre. How can companies today ensure they are staying compliant with the relevant sanctions?
In a recent post, Diligent detailed some of the key examples of trade sanctions and the impact they can have.
Trade sanctions are commonly a subset of the wider economic sanctions term, with the former also encompassing tariffs and broader economic penalties against countries. This can include embargoes, which are total bans on any trade with a country.
Other examples include non-tariff barriers – which are restrictions on trade without using tariffs – export and import restrictions, as well as tariffs and quotas.
According to Diligent, trade sanctions are often implemented against countries or individuals failing to comply with UN or other international obligations that threaten global security or support terrorism.
However, it goes beyond this. In July this year, the EU revealed it plans to introduce sanctions on countries that fall short of labour laws or sustainability.
Diligent highlighted, “International trade sanctions imposed by several nations are more punitive than those enforced by one country — but even those set by a single nation can be highly effective. For instance, the sanctions introduced by major trading countries like the US can have a significant impact.”
The company remarked how the invasion of Ukraine by Russia has made trade sanctions a ‘hot topic’ again. The US’ sanctions against Russia, the firm claims, are an example of economic and trade sanctions.
Meanwhile, North Korea is another country that is subject to a range of international sanctions. Initally, Initially, unilateral United States trade sanctions were prompted by hostile North Korean action against South Korea. Following an easing-off of U.S. sanctions in the 1990s, North Korea is currently subject to significant sanctions imposed as part of UN Security Council Resolutions in response to the country’s nuclear weapons program.
Diligent concluded, “With the geopolitical climate constantly changing, businesses must be on the front foot to keep up with their sanctions obligations. Sanction screening is one way to manage compliance. Ensuring you keep pace with changes in the wider governance, risk and compliance (GRC) landscape is another.”
Find the full post here.
