HomeSanction Lawyers
When an individual, organization, or country acts improperly, sanctions can be imposed as a consequence. These sanctions encompass various restrictions, including limitations on financial activities, trade, movement, and participation in international agreements. Such measures can profoundly impact economic and social life, creating substantial obstacles for conducting business or managing personal affairs.
If you are facing sanctions against yourself, your company, or your country, and are seeking a resolution, the expert solicitors at Intercollegium are here to assist you. Our team provides specialized guidance to navigate and address these complex issues effectively.
What are Sanctions?
Sanctions are measures intended to limit individuals or states that have breached international law norms. The primary aim of sanctions is to restrict certain individuals’ access to the international financial system. Other restrictions include freezing their assets, denying access to loans, and limiting participation in international trade. The sanction process is designed to weaken the ability of countries or individuals to finance their operations, acquire weapons or technologies, and fund their unlawful activities. Sanctions are a form of economic pressure aimed at compelling target organizations to change their behavior or face the consequences. Our solicitors can provide assistance, expert consultations and support if you have been affected by sanctions, as well as providing clear and comprehensive advice on the applicability of sanction regimes and the options available for compliance.
Types of Sanctions
The term “sanctions” in the modern world has acquired special significance, being a tool of political, economic, and diplomatic influence. Sanctions can be imposed both unilaterally by individual countries and by international organizations. Their goal is to influence the policy or behavior of a state, organizations, or specific individuals without resorting to direct military intervention.
Economic sanctions
Economic sanctions are a set of measures that restrict economic relations with a violating state or companies and individuals associated with them. They can be imposed to protect national security interests or to exert pressure in cases of violations of international law.
Unlike military or diplomatic measures, economic sanctions primarily affect the financial and trade sectors, prompting a reconsideration of undesirable or unlawful actions without direct military intervention.
Export control implies a prohibition or restriction on the export of certain goods and technologies (especially dual-use, i.e., civilian-military). The mechanism requires companies to obtain appropriate licenses and comply with government-established regulations. The goal is to hinder access to critical resources and technologies that can be used for military purposes, increasing political pressure, or violating human rights.
Trade embargo is a broader form of restrictions in which countries fully or partially refuse to engage in trade relations with “problematic” states in order to weaken the economy of the violating country. It can be targeted (for example, an embargo on arms supplies) or comprehensive (affecting many industries).
Those ignoring the established company restrictions may face serious fines, account freezes, and in some cases, criminal prosecution. Upon discovering connections with sanctioned goods or individuals, government agencies, banks, and financial institutions may block transactions or refuse to enter into new contracts.
Qualified legal assistance from export sanctions solicitor and economic sanction lawyers allows minimizing risks, developing an effective strategy for compliance with sanction requirements, and avoiding significant financial and reputational losses.
Financial sanctions
Financial sanctions are aimed at restricting access to financial resources and institutions. This type of sanction is considered one of the most effective in the modern world, where international financial operations play a key role.
Freezing of assets includes the blocking of bank accounts, securities, and other property belonging to individuals listed in sanction lists. The goal is to prevent the use of resources for financing illegal activities.
The ban on transactions also applies to intermediaries (financial organizations) that have violated the rules and knowingly or negligently conduct deals with “sanctioned” individuals. Government regulators or international institutions prohibit financial organizations from carrying out any operations on the accounts of sanctioned individuals (transfers, payments, lending). Financial sanctions lawyers advise financial institutions on how to comply with these regulations. Non-compliance with the prohibitions may result in large fines, blocking of their own accounts or licenses, and in particularly severe cases, criminal liability.
Restricting access to financial institutions creates obstacles or a complete ban on cooperation with sanctioned individuals (closing the possibility of placing bonds on the stock exchange, obtaining loans from international banks). The goal is the financial isolation of the sanctioned party, which is forced to seek workarounds or alternative financing channels.
Offshore sanctions
Offshore jurisdictions traditionally attract companies due to low tax rates, simplified registration rules, and flexible corporate laws. However, in the context of international sanctions aimed at combating illegal finances, corruption, and money laundering, offshore entities have become a focus of close attention from governments and regulators. Offshore sanctions represent a set of measures that restrict or completely prohibit the use of offshore structures for conducting transactions and managing assets of individuals and companies included in sanction lists.Offshore sanctions lawyers play a crucial role in advising companies on compliance with these regulations.
Offshore structures are often registered to nominal owners, but the real beneficiary may be a person under sanctions. When regulators and financial institutions identify the actual connection of an offshore company with such a person, they may extend sanctions to this organization.
If a company is registered in a jurisdiction with insufficiently strict requirements for disclosing information about beneficiaries and sources of funds, it risks facing sanctions for possible involvement in money laundering, financing terrorism, or other illegal activities.
Banks and other financial institutions are required to verify (through compliance mechanisms and KYC) whether an offshore company is involved in the conducted transactions. At the slightest suspicion, operations may be frozen or blocked. If the bank identifies that a beneficiary is under sanctions, it may not only block the funds but also completely terminate services for such a client. Additionally, offshore legal entities may face more complicated procedures for obtaining licenses, permits, and other documents.
International sanctions
International sanctions are restrictive measures jointly adopted by several countries or major international organizations to influence a state, organization, or individual that has violated international norms or created a threat to global stability. Unlike national sanctions, international ones have a broad scope and can significantly impact the economy and politics of the sanctioned entity. International sanctions lawyers play an essential role in advising entities on compliance with these measures.
The key goal of international sanctions is to enforce compliance with international law, maintain global peace and security, and encourage diplomatic resolution.
The UN Security Council can impose various types of sanctions (arms embargo, financial restrictions, travel bans, etc.). Security Council resolutions are mandatory for implementation by all UN member states.
The EU forms a common sanctions policy that all member countries are required to comply with. Mechanism of adoption: the decision to impose sanctions is developed by the Council of the European Union, based on the common foreign and security policy.
OFSI administers and monitors compliance with financial sanctions imposed by the UK government. After Brexit, OFSI’s influence in international sanctions policy has become particularly noticeable.
Personal sanctions
Personal sanctions are directed specifically at certain individuals or legal entities, rather than the entire state as a whole. They allow targeted actions against people deemed responsible for violations of international law, corruption, human rights violations, or other unlawful actions. Sanctions attorneys play a critical role in advising those affected by personal sanctions on how to navigate legal challenges.
Subject to personal sanctions:
- High-ranking officials: presidents, ministers, deputies, who are suspected of being involved in improper decisions or actions;
- Businessmen and oligarchs engaged in entrepreneurial activities and connected with state policy;
- Representatives of law enforcement agencies: military, police, and special services, who are accused of repression, brutal actions against the civilian population, etc.
Visa restrictions – a ban on entry or transit through the territory of the sanction-imposing state.
Freezing of assets – blocking of bank accounts, investments, real estate, securities belonging to a sanctioned person. Deprivation of access to financial resources, as well as restriction of the ability to conduct transactions and conclude major deals.
Public announcement – inclusion of a person in an official sanctions list available to banks, brokers, and insurance companies. It can seriously affect reputation, limit business opportunities, and restrict movement in the international space. Sanctions solicitors help individuals and companies deal with the legal implications of such public announcements.
“Ordinary” people do not suffer from import restrictions or financial operations — sanctions target leaders or companies engaged in illegal activities.
Diplomatic sanctions
Diplomatic sanctions are related to the restriction or suspension of official contacts and relations between states, aimed at influencing the policy or behavior of a country without using military or economic levers. They affect the political sphere and the symbolic presence of the state on the international stage.
The purpose of diplomatic sanctions is to express official protest and disapproval, compel negotiations and concessions, prevent military escalation, and maintain the possibility of a peaceful resolution.
Diplomatic isolation affects the prestige of a state, reducing its influence on the international stage. The broader the support for sanctions from the global community, the stronger the effect of isolation. Such sanctions serve as an alternative to military measures, providing time and incentive to seek a diplomatic compromise.
Examples of diplomatic sanctions: recalling an ambassador, declaring diplomats “personae non gratae,” closing embassies and consulates, refusing to participate in joint international events. Sanction lawyers assist clients in addressing legal issues arising from these diplomatic sanctions.
Our sanctions solicitors will assist you in getting the sanctions lifted. They will also provide you with the necessary consultations tailored to your situation, help in preparing the required documents, and can represent your interests in international organizations.
Financial Sanctions: What You Need to Know
When financial sanctions are applied, an individual, organization, or country is restricted or excluded from international economic relations. Financial sanctions are imposed to coerce a change in behavior of a state, legal entity, or individual. The imposition of trade sanctions results in the restriction or cessation of access to key resources necessary for the continuation of the sanctioned behavior. Such restrictions include the need to obtain consent from international bodies for the receipt of funds from sanctioned countries, as well as a prohibition on receiving such funds. Restrictions can also apply to investments by organizations and supply contracts. Common forms of financial sanctions include:
- Asset freeze. This is applied to both individuals and legal entities, restricting access to and use of funds and economic resources.
- Restrictions on financial markets and services. For example, a ban on making investments, limitations in the insurance sector, and the provision of brokerage and other financial services;
- An order to cease business operations with a specific individual, group, sector, territory, or country.
What Are the Consequences of Breaching Sanctions?
Breaching sanctions can have serious legal, financial, and reputational consequences for individuals, companies, and organizations.
Legal consequences include:
- Fines and sanctions: breaching sanctions can lead to substantial financial penalties. The size of the fine can vary depending on the scale of the violation and the country that has imposed the sanctions.
- Criminal liability: in a number of countries, breaching sanctions can be considered a criminal offense. This could lead to criminal prosecution, including imprisonment for those responsible.
- Asset confiscation: governments can freeze or confiscate the assets of companies or individuals who have breached financial sanctions.
Our sanctions solicitors will assist you in challenging the imposed economic sanctions and provide expert advice on operating under the sanctions regime.
Risk of Legal Prosecution
Breaching sanctions regulations can lead to severe consequences, including restrictive measures and even criminal prosecution. To avoid such dire outcomes, it is crucial to consult a sanctions solicitor specializing in international sanctions law. A knowledgeable lawyer will meticulously analyze your case, assess potential risks, and recommend effective steps to mitigate them, ensuring your actions are compliant and your interests protected.
Export Control Regulations
Export control refers to a system of legal and administrative measures implemented by a state to regulate the export of goods, technologies, services, and information beyond its borders. The primary aim of export control is to ensure national security, protect the economic interests of the state, and comply with international commitments. The enforcement of export control involves measures to monitor the export of goods and services from countries that are under sanctions. This includes overseeing the process of exporting goods that could be used for civilian and/or military purposes. For certain categories of goods, an export licence is required.
Main World Sanction Regimes
There are several types of sanctions regimes in the world. They have their own permanent body that regulates the rules and procedures for imposing sanctions. Such countries and organizations have implemented their own sanctions regimes, which are applied in cases of violations of international law. These regimes include:
- MOFCOM Sanctions. The Chinese Ministry of Commerce is responsible for the development and implementation of sanctions measures. MOFCOM sanctions include restrictions on the import/export of goods and retaliatory measures against sanctions targeting China and Chinese companies.
- DFAT Sanctions. The Department of Foreign Affairs and Trade in Australia is responsible for regulating the sanctions regime in the country. These are aimed at restrictions in trade, freezing of assets, and bans on crossing borders.
- SEMA Sanctions. The Special Economic Measures Act of Canada provides the means to impose sanctions. These include the freezing of assets and a ban on crossing borders.
- OFAC Sanctions. The Office of Foreign Assets Control is a part of the US Department of the Treasury. It is responsible for enforcing sanctions, which include freezing assets and imposing restrictions on trade operations.
Each of these sanction regimes demonstrates how various states and bodies respond to violations of international law. These sanction regimes have their own characteristics and procedures for application, aimed at restoring the rule of law.
Which of our lawyers work with Sanction?
Dmytro Konovalenko, is a lawyer with many years of experience in dealing with the Interpol Sanction Defence.
Anatoliy Yarovyi, lawyer, Doctor of Laws. Anatoliy specializes in appeals against INTERPOL Red Notices and International Sanctions.
How Our Solicitors Can Help?
Sanction measures have a significant impact on various sectors. To avoid any troubles related to sanctions, you will need the assistance of a qualified solicitor. By turning to us, you will receive:
- Assistance for individuals and organizations. Our solicitors assist individual clients and organizations that may be at risk of facing sanctions or have already encountered them.
- We operate in accordance with various sanction regimes. The importance of legal assistance increases when providing support in various sanction regimes. Our solicitors possess the requisite theoretical knowledge and have many years of experience working with various sanction regimes, ensuring qualified assistance.
- We have considerable expertise in such matters. To assist you, our solicitors conduct a comprehensive analysis of your situation, paying attention to all the nuances of the case. This ensures the quality of support provided in resolving complex issues in the realm of sanctions.
- A comprehensive range of legal services. We offer a variety of legal services, from an initial analysis of your situation to representing your interests in international organizations.
Engage our expertise in navigating sanctions to safeguard against legal pitfalls and financial setbacks. We ensure your full compliance with international regulations, providing you with peace of mind in today’s complex landscape.
Who imposes international sanctions?
International sanctions are imposed by national governments (such as the U.S. or the EU), international organizations (like the United Nations), or regional bodies (such as the European Union). These sanctions are used as a foreign policy tool to address issues such as human rights violations, terrorism, or nuclear proliferation.
What types of sanctions exist?
Sanctions can take various forms, including financial sanctions (freezing assets), trade sanctions (banning exports or imports), travel bans (restricting entry or movement), and arms embargoes (prohibiting the sale of weapons). Some sanctions target individuals or entities, while others apply to entire countries or industries.
Who must comply with international sanctions?
Any individual, company, or organization that operates under the jurisdiction of the sanctioning authority must comply with international sanctions. This includes citizens, residents, and businesses of sanction-imposing countries, as well as foreign entities doing business in those countries or involving assets subject to the sanctions.
How can I challenge or request removal from sanctions list?
To challenge or request removal from a sanctions list, you need to submit a formal request to the sanctioning body, such as the Office of Foreign Assets Control (OFAC) in the U.S. or the European Union’s sanctions committee. This process usually requires presenting evidence that you no longer meet the criteria for sanctions or that the listing was incorrect.
How can I ensure compliance with sanctions regulations?
Ensuring compliance with sanctions regulations involves regularly screening business partners, clients, and transactions against sanctions lists, implementing internal controls and compliance programs, and staying up to date on changes to sanctions laws. Consulting with a sanctions lawyer or compliance expert can help avoid violations and ensure adherence to international sanctions.
