Monday, 20 October 2014

Which Countries are Currently Under US Sanctions?

A reader wrote in to ask which countries,  other than Iran and North Korea, they should be wary of trading with because of potential US Sanctions problems; as they are just about to enter a contract with a US entity and want to ensure compliance with all US regulations. The answer is an awful lot of countries.

The USA currently sanctions involving the following countries and regions of the world:

- Balkans
- Belarus
- Burma
- Central African Republic
- Cuba
- Democratic Republic of Congo
- Ivory Coast
- Iran
- Iraq
- Lebanon
- Moldova (Magnitsky sanctions)
- North Korea
- Russia
- Somalia
- Sudan
- South Sudan
- Syria
- Ukraine
- Yemen
- Zimbabwe

The content of these sanctions differs from country to country and some are extra-geographic (not country specific), such as the diamond trade sanctions and restrictions on criminal organisations, however, it is important to ensure compliance in the above regions, particularly when trading in US Dollars.

The Risks of Trading in the Ukraine

Many shipowners are asking at present - what are the risks of trading in the Ukraine in the current circumstances?

Well apart from the dangerous security situation in the eastern and southern provinces, the principal risk is that of breaching the US and western sanctions. The full sanctions of the US are available here but in short, in response to events in the region in 2014 there were three rounds of international sanctions, both from the US and the EU and other western nations (Australia, Switzerland, Japan etc.). Most of these actions were restrictions on Russian individuals, companies and banks from trading, travelling etc. but some of the sanctions are so far reaching that, in order to ensure no breaches occur, a party trading with or in Ukraine must essentially choose to either trade with Crimea (now under Russian control) or with the remainder of Ukraine (Odessa or Kiev for instance).

If you move between a contested region and government controlled Ukraine, especially if you transport cargo between the two, you will be at risk of sanctions related penalties, vessel seizures and potentially confiscations. The risk is especially strong trading from Crimea to Odessa and there are reports of an increase in vessel arrests in the region generally. Shipowners beware.

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