Sanctions are a complex area for businesses to navigate. Caroline Dutot reviews the best practice for businesses who risk discovering their clients are connected to a sanctioned country or regime.
Sanctions are measures adopted against a country or regime believed to be violating international law. Any entity (a) located in Jersey (b) operating in or from within Jersey or (c) incorporated or constituted under Jersey law, is required to ensure that when conducting its business sanctions measures are complied with.
Sanctions are a complex area for businesses to navigate, not least because the sanctions regime for each country or regime is different. What may be permitted in respect of one jurisdiction, is prohibited in another. Consequently, when a connection between a client and a sanctioned country or regime is discovered, this can often result in a business taking the decision to simply walk away from that potential or existing client relationship. This is in many ways understandable given that a breach in sanctions could lead to a criminal prosecution. However, taking the approach highlighted can mean that businesses let go of valid work without actual cause to do so.
For some sanctioned regimes, the only prohibition in place is on providing an economic benefit (broadly defined) to listed persons. For other regimes, Iran for example, the extent of sanctions is so broad that it is difficult and of a much higher risk to do business without inadvertently breaching sanctions.
So, what should a Jersey business do if it is unsure whether a sanctions connection is problematic or not? The Jersey Financial Services Commission publishes a document on its website called the ‘List By Regime’. This is a summary of the sanctions measures in place for each country or regime. For businesses this can be a good place to start and helps them to establish whether an issue requires further investigation or not. Where that initial review flags a potential problem, then it is best to seek specialist advice in order to fully analyse the underlying legislation.
Advocate Caroline Dutot is a specialist in sanctions matters, having authored the Jersey Financial Services Commission’s guidance on the subject. Advocate Dutot can be contacted by telephone on 01534 481809 or by email on cdutot@ardentchambers.com
