How can a business avoid falling under international sanctions?

In the current geopolitical tension, compliance with international sanctions regimes has become not just a matter of legal caution, but an integral part of the sustainable development strategy for any international company. Violation of sanctions legislation entails not only fines and asset blocking, but also reputational risks, which can be difficult to recover from.

Experts from the international law firm Antwort Law share practical recommendations on how to effectively minimize sanctions risks and build a business so as not to end up in a zone of legal turbulence.

The most important rule: do not work with those who are already under sanctions

In practice, the most effective way to avoid falling under secondary sanctions remains the obvious rule - do not enter into financial or contractual relations with entities already under sanctions. To follow this principle, companies need to build sustainable sanctions compliance procedures.

Before establishing business relations, it is mandatory to check the counterparty in the following areas:

• Presence in the sanctions lists of the EU, UK, USA, UN;
• Checking affiliates and ultimate beneficiaries;
• Assessment of the jurisdiction of registration and conduct of the main activity;
• Analysis of business reputation and previous cases of interaction with sanctioned entities.

Companies that ignore the basic principles of compliance find themselves in the zone of the greatest risk. Especially if they do business with high-risk jurisdictions (high-risk third countries according to FATF and the EU).

Current sanctions lists are available on official platforms:

• United Kingdom (HM Treasury Sanctions): gov.uk
• European Union (EUR-Lex): eur-lex.europa.eu
• USA (OFAC SDN List): home.treasury.gov

For example, in October 2024, the UK HM Treasury added 16 new cyber-related entities to its sanctions list. And on June 24, 2024, the EU expanded sanctions against Russian individuals and companies. Such updates occur regularly, and the lack of monitoring can have costly consequences.

Choosing safe jurisdictions for doing business

Registering a company in a "clean" jurisdiction is another factor in minimizing sanctions pressure. When choosing a country, it is necessary to consider:

• the level of political and financial stability;
• the presence of international agreements on the avoidance of double taxation;
• the degree of transparency of corporate reporting;
• no restrictions from banks on servicing non-residents.

Payments: risks and protection

Even one mistake in a transaction can lead to blocking the payment channel. To avoid this:

1) Make sure that the payment goes through a bank that is not under sanctions;
2) Provide the bank with all the documents justifying the origin of the funds and the purpose of the payment;
3) Avoid schemes using dubious fintech solutions and "workarounds" - this is a high-risk strategy, especially for companies from CIS jurisdictions.

What to do if you are already under sanctions?

There are situations when a company or its beneficiaries are subject to sanctions by mistake or without sufficient grounds. In such cases, it is possible to challenge the sanctions in EU courts, and we cooperate with reliable European legal partners specializing in such cases. Our partners have successful experience in:

• conducting legal cases against the EU Council;
• restoring the business reputation of companies and individuals;
• exclusion from sanctions lists through administrative and judicial procedures.

It is important to understand that such procedures are not quick or cheap, but in some cases they allow you to restore access to bank accounts, international activities, and avoid unjustified restrictions.

Preventing international sanctions is a complex and strategically important task. It requires systematic work, attention to detail, transparent documentation, and an understanding of the current regulatory environment. Antwort Law provides a full range of support for sanctions compliance, structuring businesses in safe jurisdictions, checking counterparties, and legal support for international transactions.

We will help you build a defensive strategy and keep your business within the law, even in the face of growing sanctions turbulence. Contact us — and you will receive not just legal advice, but a strategic solution.

Lidia Ivanova

International lawyer
Antwort Law