By Adam Turteltaub

When assessing global compliance risks, anti-corruption issues tend to grab the headlines, but they are far from the only concern.  Trade sanctions, which are risk with complexity can be an enormous challenge for organizations.

Kerry Contini, a partner in the Washington, DC office of the firm Baker McKenzie explains in this podcast that there are three kinds of sanctions:  embargoes, targeted, and restricted parties.  Embargoes are the simplest to understand since entire countries, such as Cuba and North Korea, are included.  But, beyond that, it gets more complicated, requiring companies to know who the individuals are in a deal that they are doing.

If a Specially Designated National (SDN) owns more than 50% of a company, then it could be illegal for you to sell to it.  That’s a challenge since it’s not easy to get that ownership information, given opaque business structures, especially in a country like Russia.

Likewise, a sale may not be permissible if the destination of the goods sold is a place like Crimea, or if the goods are intended for certain energy projects.

Listen in to the podcast to better understand the pitfalls of trade sanctions, and how you can better manage this dangerous compliance risk area.