DOING BUSINESS IN A WORLD OF SANCTIONS AND EXTRATERRITORIALITY

The number of sanctions is growing throughout the World; they can be imposed by one state (bilateral) or by several (multilateral) and can even target major powers

Sanctions have serious humanitarian consequences as they impact first and foremost the most vulnerable parts of the population

Sanctions lead – on a regional level – to the criminalisation of business through the development of an underground economy, which is supported by the target state as it aids in reducing the impact of sanctions while increasing the wealth of a powerful elite

The sanction system develops corruption within government institutions

The new practice of smart sanctions (more targeted sanctions) is deemed more effective

Sanctions are principally financial, monetary or commercial in nature. Those targeting individuals raise the issue of respecting the individuals’ rights (there are numerous instances of sanctions being overruled by the European Court of Justice)

Sanctions disrupt bilateral trade, prove costly for the sanctioning country and often provoke retaliation that is even more costly

In the long term, prohibitions to invest in certain countries damage economic operators in the sanctioning country, to the benefit of their competitors

Sanctions lead the target state to form new and alternative partnerships with countries not respecting the sanctions in place.

The United States imposes the effects of its sanctions upon all stakeholders with US interests, by imposing the extraterritorial application of US laws

The list of countries sanctioned by the United States is based on US foreign policy criteria. This is the sole judgement as to the “desirability” of foreign governments, which is then imposed upon all players in the global economy

The extraterritoriality of United States law imposes a strict compliance with US foreign policy upon every business that has subsidiaries, suppliers or clients in the United States or that is listed on Wall Street

US courts assume jurisdiction to sanction all transactions conducted anywhere in the world in US dollars, or having resulted in an email exchange passing through a server located on the US territory

Several billions Dollars in fines have been paid in the last few years by European firms accused of violating US sanctions or engaging in activities contrary to US legislation

Businesses considering trade with countries under US embargo must first seek the assistance of a specialist in US law