It’s important to understand your obligations in relation to domestic and international sanctions and embargoes, and how they may potentially impact your business before entering into arrangements with offshore providers and/or their agents.
If you’re involved in any of the following transactions you’re at risk of a sanctions and embargo violation:
– You make a payment directly to someone who is subject to sanctions or embargoes.
– You make a payment into an account located in a non-sanctioned country, however, the account holder or the beneficiary is located in a sanctioned country.
– The movement of funds and/or goods in your transaction involves a party who is subject to sanctions or embargoes (for example airlines, banks, shipping vessels and ports).
– You structure a payment that would have otherwise been captured under sanctions regulations.
What is a sanction?
Sanctions are frequently used by governments to implement foreign policy and fight financial crime and terrorist organisations. Sanctions act as a non-violent foreign policy tool designed to influence a country, specific person, legal entity and/or organisation. This is intended to deter activities which may include providing sanctuary for international criminals (such as terrorists); the proliferation of nuclear weapons development and abuses of fundamental human rights.
Sanctions affect financial institutions such as NAB and their customers by placing restrictions and controls on the movement of goods, services and money. These restrictions can include:
– Prohibiting the transfer of funds to and/or from a sanctioned country and/ or Specifically Designated Nationals (SDN);
– Freezing the assets of a government, entity, individual and/or resident of a sanctioned country;
– Prohibiting particular types of activities;
– Imposing travel bans; and/or
– Other financial and diplomatic restrictions.
What is an embargo?
An embargo is a unilateral or collective restriction on the import or export of goods, material, capital or services into or from a specific country or group of countries. Embargos are similar to sanctions and are legal barriers to trade.
NAB and its customers are legally bound to adhere to sanctions and embargoes imposed by relevant jurisdictions. Any infringements on trade in sanctioned or embargoed goods and services or dealings with ‘Specially Designated Nationals’ (SDN) are serious offences and can result in severe penalties, including seizure of goods, significant fines and even imprisonment.
For further detail about sanctions and embargoes, and how your business may be affected, download the attached information booklet or speak to your Agribusiness Banker.
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This article first appeared in NAB's Agribusiness view. To read the original, click here.