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Sanctions risks to rise in 2020 as regimes grow in complexity

October 10, 2019
A report released today by consultancy Control Risks examines the increasingly complex and unpredictable global sanctions landscape that businesses will face in the year ahead.

London, Oct. 10, 2019 (GLOBE NEWSWIRE) -- Nationalistic US foreign policy, disagreements within the US administration and divergence between the US and Europe will all combine to create a sanctions environment fraught with risk, says the report from global specialist risk consultancy, Control Risks. Adding to the complexity is a growing crop of sanctions regimes being adopted by US allies and opponents - most notably by China and in the Gulf - and sanctions that apply to individuals associated with corruption and human rights abuses.

Navigating the global sanctions landscape in 2020: Diverging paths, increasing risks, identifies five key trends shaping global sanctions risks:

  1. The US is more and more willing to use sanctions, especially as geopolitical dynamics have made it increasingly difficult for the UN Security Council to do so. While the US can afford to impose unilateral primary and secondary sanctions, the lack of international legitimacy greatly complicates implementation – in turn making them less effective.
  2. There is divergence within the US on the use of sanctions. Discrepancies exist between the President’s own intentions and those of his administration and the wider Republican Party. Growing political polarisation in Washington means that significant differences over sanctions policy also persist between the Trump administration and Congress.
  3. There is even greater divergence between the US and the EU on the use of sanctions. Divergence between Trump’s US and key European allies on major foreign policy issues – above all, Iran – is further complicating the global sanctions landscape and increasing sanctions risk.
  4. The US is encouraging its allies to adopt their own sanctions regimes. Most notably, Gulf states have joined this trend and will continue to add to blacklists of their own. Conversely, countries in antagonistic positions to the US, most notably China, are also considering comparable measures of their own.
  5. Country-agnostic sanctions regimes further complicate the global sanctions landscape. Extraterritorial regimes that apply to persons in countries not otherwise subject to sanctions are likely to continue to spread, most notably on human rights and corruption.

How do businesses respond?

The Control Risks report identifies Iran, North Korea, Russia, Venezuela and Syria as the countries to watch when assessing sanctions risks, but stresses that businesses must also remain alert to the risks of dealing with non-sanctioned countries that trade with these five, for example, Turkey with Iran and China with North Korea.

Businesses should keep abreast of guidance from the US Office of Foreign Assets Control (OFAC) and the EU and keep up to date with enforcement actions, says the report.

“Companies should also conduct due diligence beyond immediate counterparties,” said report co-author Henry Smith. “Recent enforcement actions by the US authorities demonstrate the need to consider sanctions exposure throughout your value chain – suppliers through to customers and all that is in between,” added Smith.

Notes to Editors:

Access the full report here.

About Control Risks

Control Risks is a specialist global risk consultancy that helps to create secure, compliant and resilient organisations in an age of ever-changing risk. Working across disciplines, technologies and geographies, everything we do is based on our belief that taking risks is essential to our clients’ success. We provide our clients with the insight to focus resources and ensure they are prepared to resolve the issues and crises that occur in any ambitious global organisation. We go beyond problem-solving and provide the insights and intelligence needed to realise opportunities and grow.



Kate Rallis Control Risks 212-561-5302 kate.rallis@controlrisks.com Nicky Stephens Control Risks + 44 7977982146 nicola.stephens@controlrisks.com 


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