Sanctions Update - May 2012

Continuing unrest in the Middle East and North Africa, the on-going crisis in Syria and increasing tensions between Iran and the West over Iran's nuclear programme are resulting in a number of far-reaching trade sanctions, the implementation of which is patchy and the impact often unpredictable.

While the direct and immediate effects of sanctions may be in line with governments' intentions, the flow of international trade is increasingly affected by:

Concerns around compliance Reduced ability to rely on letters of credit Issues regarding goods in transit The ability to buy insurance. To facilitate debate around the issues raised by international sanctions and to shed some light on current experience, Clyde & Co's commodities team held a seminar in London on 17 April 2012 attended by around 50 commodity producers, intermediaries and bankers.

Panellists at the debate, which was conducted under Chatham House rules, included Jonathan Marsh, Head of Legal at Vitol, Jason Mantovan, Senior Legal Counsel at Stemcor, Andy Wragg, Senior Manager, International Regulatory Affairs at Lloyd's, Nick Williams, Head of Corporate Sales, Trade and Supply Chain Europe at ANZ Bank and Simon Rainey Q.C, Joint Head of Quadrant Chambers.

This newsletter provides a brief summary of the discussion and the issues raised. We are delighted to provide further advice and insight on request.

International sanctions regimes are increasingly complex

Panellists and audience members discussed how growing antipathy towards military intervention means the use of international sanctions is likely to be more frequent going forward. Whereas in the past, sanctions were introduced over time, often in a co-ordinated manner between the EU, the UN and US, now individual states are imposing their own sanctions, often at short notice, on the same jurisdictions, each adopting a different approach.

Attendees at the seminar agreed that the resulting plethora of regimes and their different, sometimes conflicting, requirements are slowing the speed and reducing the volume of international business being transacted.

Compliance is a challenge

Due to the speed at which sanctions are usually imposed, there is often a dearth of official advice around implementation resulting in companies, bankers and lawyers having to devote more time and effort to compliance than ever before in order to navigate through the increased contractual and commercial exposures.

Practical compliance issues were cited as...

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