2022 Was 'Watershed Moment' for Sanctions, Export Controls, Law Firm Says
While companies should expect the U.S. to continue to coordinate trade restrictions with Europe this year, the EU, the U.K. and others may look to impose “broader” measures than the U.S. does as those nations try to strengthen their individual sanctions regimes, Willkie Farr said in a client alert this month. The firm also said the sanctions cooperation among many of the world’s democracies in 2022, particularly the trade restrictions imposed on Russia, “highlighted the divergence between governments and increased the demand on compliance teams.”
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“Last year was a watershed moment for sanctions and export controls,” the firm said in its 2022 U.S. sanctions and export controls year in review. “Whereas before, companies could generally meet their sanctions obligations to most applicable jurisdictions by complying with U.S. sanctions, now, companies must consider that other sanctions regimes may be more stringent than those implemented by the United States.” It also said an increasingly “expansive view of national security” will force more companies to “review their obligations under those regulations.”
The firm expects the current pace of new U.S. export controls to continue this year. But those controls may not always “correspond” to other government measures, including sanctions administered by the Treasury Department. “Companies should ensure that their activities comply with both U.S. sanctions and export controls when entering into transactions in high-risk jurisdictions such as Russia and China,” the firm said.
The firm’s year in review covered developments surrounding sanctions against Russia, enforcement actions related to cryptocurrency, the Commerce Department’s use of the foreign direct product rule and more from 2022. The firm said financial restrictions “continued to be the U.S. government’s tool of choice in response to a range of foreign policy challenges.”