Sanctions and export control risk has risen sharply, due to complex and rapid regulatory shifts, adopted with little notice and lead time.
There is now an established history of companies forced to pay significant criminal and civil fines to multiple enforcement agencies for miscalculating the risk of strategic business decisions. A failure to recognise the risk can have serious and far-reaching implications for the reputation of a business – and for members of the board individually.
Clifford Chance will help you stay on top of this ever-changing legal landscape, enabling you to move your business forward in line with your strategic objectives. We are working with some of the world’s leading companies in relation to their sanctions and export control strategies.
Be clear on sanctions and export control risk
5 questions to ask yourself
How will new sanctions and export control laws impact us?
Changes to sanctions and export control laws and regulations have never before come so fast and so furious with little, if any, prior warning or consultation. Any cross-border business needs to find nimble solutions to react and adapt to multiple and conflicting legal frameworks. Are you confident that changes to sanctions and export control relevant to your business will be anticipated, and addressed quickly enough so that necessary changes can be implemented effectively throughout your organisation?
Do our compliance systems address the new, emerging sanctions risks?
Sanctions and export control compliance remains a moving target. Does your business have compliance systems that meet existing challenges and will easily adapt to changes in sanctions and export controls, to identify and mitigate new risks as they emerge? Is your board receiving the information it needs to take informed decisions about the risks to the business?
Are sanctions given due prominence in our M&A due diligence?
When buying any business, sanctions and export control due diligence must be high on the list of considerations. Will the target’s current or historical business activities lead to future enforcement activity – with possible legal, financial and reputational costs for your business? Asking the right questions – and understanding the responses – will enable appropriate contractual protections to be sought from the vendor.
Are we confident that our employees will recognise a sanctions issue?
Employees are on the front line for spotting potential sanctions and export control issues – and must react promptly and appropriately if an issue is identified. Employee training on the "red flags" relevant to your business is crucial.
How will we respond to a suspected sanctions or export control violation?
Identification of a suspected violation inevitably requires swift action – but also strategic thought. Will the steps taken to investigate the suspected violation stand up to scrutiny if a formal investigation follows? If a violation is identified, there may be advantages in proactively engaging with enforcement agencies. However, the process of communication with any government authority needs careful management.