Sanctions: Beyond Banks

Sanctions have taken on a role like the U.S. Foreign Corrupt Practices Act of 1977 (FCPA). Just as the FCPA transformed compliance for corporations by targeting bribery and corruption in international business, sanctions now play a critical role in shaping the operational landscape for those conducting business around the globe. The FCPA’s impact has been profound, setting a precedent for anti-corruption laws worldwide and ratcheting up the compliance agenda for corporations. Similarly, the evolving nature of sanctions regimes requires businesses to adopt rigorous compliance strategies whilst demanding that businesses stay informed and adaptable to the rapidly changing compliance landscape. The penalties for sanctions noncompliance include hefty fines, criminal prosecution, and significant reputational damage, but also go beyond the FCPA – regulatory agencies have the administrative authority to exclude a corporation from the U.S. financial system, deny access to essential technology, and freeze assets.

A Framework for OFAC Compliance Commitments

What's next?

Sanctions have become a critical aspect of international business compliance for corporations, mirroring the transformative impact of the FCPA. With regulators stating sanctions enforcement will follow the path of the FCPA and it not just being a concern for banks and financial institutions, corporations must remain vigilant and proactive in their approach to managing sanctions risk, integrating comprehensive compliance strategies, and fostering a culture of ethical conduct to navigate the complexities of this ever-evolving regulatory landscape.