The Russian invasion of Ukraine has thrust sanctions compliance up the agenda for law firms of all sizes. BCL's John Binns spoke to Katharine Freeland for her article in The Law Society Gazette explaining the need for law firms to demonstrate the appropriate screening process of all clients and suppliers.
Here is a short extract from the article*. If you wish to read the full article, please visit The Law Society Gazette website here to download the publication.
"Western policy on sanctions has evolved considerably since the imposition of wholesale finance and trade embargoes such as the one levied against Iraq by the UN National Security Council in the 1990s.
Targeted or 'smart' sanctions now focus on designated individuals, while sectoral sanctions restrict trade with certain industries in the target country, catching anything from the export of pistachios from Iran to the import of luxury goods to North Korea. The US exploits the strength of the dollar by asserting US jurisdiction over virtually any transaction that uses it; it also increases the impact of US designations by using secondary sanctions, targeting commerce between a party under primary sanctions and others conducted outside US legal jurisdiction. North Korea, Iran, Syria and Russia have been the targets of secondary sanctions.
Pre-emption is important, rather than waiting for a sanctions issue to emerge. 'Law firms need to demonstrate that they use the appropriate screening process for all clients and suppliers,' says John Binns, partner at BCL Solicitors. Law firms with Russian clients have had tricky discussions with insurers on how they have 'de-risked' these parties. It has been a steep learning curve for everyone in the profession."
*This article was first published by The Law Society Gazette on 31 March 2023.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.