The UK government this week introduced sanctions that could target businesses that are thought to be benefiting or supporting the Russian government and its owners, directors and trustees. ۔
The new standard would impose sanctions on Russia’s largest and most strategically important businesses, including in the chemical, construction, defense, electronics, energy, financial services, transport and digital technology sectors. There is a lot of speculation about the broader package of sanctions that could be introduced to potentially target exports, trade and Russian financial institutions.
Starting with a review of business agreement arrangements with Russian counterparts, businesses can take action before any increase in sanctions. Dismissal, law-making and jurisdiction clauses in any Russia-related agreement should be reviewed to identify treaties for the available agreement if any new sanctions affect those relations.
For new treaties, consideration should be given to the inclusion of a clause of sanctions that would enable the suspension of the treaty if the sanctions were to be extended, and the treaty should ideally include a choice of law and jurisdiction clause from Russia. Be out
Although the United Kingdom, the European Union and the United States will try to coordinate the imposition of sanctions, none of the sanctions will be the same and corporate groups with registered and active entities in different countries will be subject to different sanctions. can.
Companies may be able to make regulatory and structural arrangements prior to the imposition of sanctions that enable business to continue, as long as the business is appropriate in a country where the business has legal status. Fencing properly. This is much more difficult because of the provisions that prevent the construction of structures after sanctions have been imposed.
Licensing authorities, banks and insurers may need to be immediately involved and be able to demonstrate that the business has customer due diligence records, sanctions screening records and end use for Russian-based customers. Announcements will be helpful. .
There will be exceptions to the goods and services exported under the license, so businesses must identify the goods, technology and / or software and services that are being exported to Russia or for use in Russia. They may need a license in the future. License applications can take time to process and licensing authorities may be overwhelmed by licensing applications, so it will be necessary to obtain them as soon as possible.
UK and EU sanctions often limit the categories of items in terms of their commodity codes. Businesses should check if they have a record of commodity codes for their products or materials and if they do not, experts should be involved in the classification practice so that it can be identified as soon as possible. Whether their products or materials have been seized by further restrictions.
American-origin goods and foreign-made products, including those of American origin, should also be identified as they could be subject to US trade sanctions and broader export controls, even if exports are outside the United States.
Stacey Kane, Senior Associate and Regulatory and Compliance Specialist at Pentecost Masons