International Enterprises and Institutional Investment
Sensitive industries - The inter-dependence of UN sanctions and global business is nowhere more self-evident than where challenging sanctions measures would be meaningless without the collaboration of those who may unwittingly provide products and services that might be used for sanctioned purposes.
|Sanctions measures||Affected industries|
|Conventional arms embargo||Defense manufacturing, international transport and logistics, banking and financial intermediaries|
|Embargo against weapons of mass destruction (nuclear, chemical, biological and missile technologies)||Manufacturing and research industries, international transport and logistics, banking and financial intermediaries|
|Assets freeze||Banking and financial intermediary services|
|Travel ban||Airlines, passenger shipping, train and other land-based transportation services, including travel agents.|
|Ban on luxury goods (DPRK)||International trade, international transport and logistics, banking and financial intermediaries|
|Restrictions on education||Technical schools and universities providing North Koreans training in nuclear and other sensitive sciences and technologies|
Additional examples for sanctions provisions that can only be responded to by companies are, among others:
Catch-All Provisions applied to most UN sanctions regimes;
Due diligence obligations for supply chain sourcing that may involve trading in certain conflict minerals from the Democratic Republic of Congo and other conflict regions;
Prohibitions against trading or sourcing of many other commodities from or to conflict zones;
Seaport and bunkering services to designated ships.
Regulatory reporting requirements relating to compliance with sanctions.
Institutional Investors - Investors can suffer material losses if a portfolio company is singled out as a sanctions violator or for entanglement with a violator. Being shut out of markets, or incurring fines and reputational losses, are typically the costs of compliance failures that investors would want to avoid.
It is therefore in the interest of investors to encourage their companies to adopt effective sanctions compliance procedures with all activities. Their interests are two-fold:
Colloquially, sanctions have often been considered a burden or detriment to business. The upcoming consultations are intended to provide a more practical and balanced perspective. UN sanctions supporting a conflict resolution strategy can in fact provide opportunities for legitimate businesses.
|Cost for compliance and due diligence staff and auditing services||Top-line global standard-setting mechanism for businesses|
|Lobbying to prevent the imposition of specific sanctions||Sanctions boost the due diligence and compliance service industry|
|Loss of revenue and profits when sanctions affect a company’s vital markets||Encourage the resolution of conflicts, thus opening new markets|
|Fines and other penalties, including civil and criminal judgments for violations||Establishing political stability enables investments and economic growth|
|Advocacy groups attack companies and undermine shareholder value||Effective application of sanctions establishes viable markets and limits unfair competition of illegitimate businesses|
For interested participants, a detailed briefing paper and a draft agenda will be available shortly.
In the interim, representatives of institutional investors or
compliance professionals are welcomed to communicate their thoughts directly to the organizers Rico.email@example.com or Loraine.firstname.lastname@example.org