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Doing business with the enemy?

Doing business with the enemy? It’s an expensive mistake to make…

Let’s be clear. Even if it’s by mistake, breaching sanctions is a criminal offense. It can lead to eye-watering fines of up to $20 million, and 30-year jail sentences. If you breach the Trading with the Enemy Act, expect a fine of up to $65,000 per infringement. The International Emergency Economic Powers Act? $250,000 for each offense.

Don’t even mention the Foreign Narcotics Kingpin Designation Act – each infraction could cost $1,075,000. Now that would sting.

Companies are often tentative about reporting breaches in case they’re found complicit. However, the US and UK governments are saying that honesty is the best policy, even for unintended sanctions breaches. As Giles Thomson, director of the UK’s Office of Financial Sanctions Implementation (OFSI), explains: “We’re not going to come after people with a sledgehammer who are seeking to do the right thing.”

Companies that do due diligence, and self-report breaches, will be treated in good faith – albeit unofficially.

So what should you do if you suspect you’ve unwittingly broken the Trading with the Enemy Act?

Your first move should be to root out the breach and put a stop to it. A breach could mean many things – a party or country that’s restricted, a type of transaction or product that is prohibited.

Next, it’s time for a preliminary review. Scope out how serious the breach is, which will help you decide how to report it to the authorities. This also means calling in the lawyers.

After that, it’s time to look internally with a step-by-step investigation. That’s where we can help you.

At The Owl, we manage specialized investigations, taking a bespoke approach to each challenge. Need to report a breach? Not feeling sure about a potential client or associate? Sanctions targets can be skilled at hiding their guilt, and this is what we can investigate for you.

Sanctions avoidance covers countless different areas. Targets might sidestep sanctions by transferring assets to family members, or using front companies. Real estate provides a usefully opaque way of laundering money and giving the appearance of legitimacy. For instance, Russian elites around the world have been trying to obscure their property investments since February 2022, for obvious reasons…

One of the most popular ways to get around sanctions is through the use of legal entities and complex corporate structures that seem clean on the outside while hiding sanctioned assets. Our job is to unpick those layers, to see where a sanctions breach could have occurred.

You really want to avoid having to report yourself to the authorities, so investigate any new individuals or companies you’re looking to do business with that. We can help with that. And we’re there if you discover something suspicious after the fact, too. Make us your first call and The Owl is primed and ready to swoop in.

Want to know more? Shoot us a hoot

Eurasian Eagle Owl

The Feisty Rebel

June 22, 2024

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