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Beware of the risks of incorrect application of international sanctions

  • Slovakia

    31-03-2022

    The situation with international sanctions are changing very quickly, the EU having announced already four major packages of sanctions against the Russian Federation and Belarus since February. In addition, several less comprehensive measures have been adopted. Below we summarise the basic principles and information on the correct application of sanctions:

    • Business partner verification – are business partners or their owners on sanction lists?
    • Attention! Sanctions are only applied to companies if the sanctioned owner has at least a 50% stake in them
    • Bans in specific sectors – such as energy – need to be monitored
    • Is the subject of the contract subject to sanctions? Products made of steel or iron, luxury products
    • Pay attention to the transitional periods for imports of steel and iron products
    • Banking and monetary restrictions need to be taken into account
    • Pay attention to local national restrictions (ban on coal imports in Poland, planned exclusion of entities from public procurement in Slovakia)
    • The obligation to report the assets of sanctioned persons

    Please note that if you do not apply the applicable sanctions, your company may face a fine or it is possible that no claims from such a transaction will be recognised. The potential reputational risks must also be considered. If sanctions are applied beyond the applicable framework, there is a risk that your company will bear the consequences of a breach of contract. If you are unsure, we recommend complying with reporting obligations under national implementing law for international sanctions.

    A document summarising the sanctions imposed in response to Russia's invasion of Ukraine: https://www.eversheds-sutherland.com/documents/global/Slovakia/en/Russian_and_Belarusian_sanctions_update.pdf

     

     

    Bernhard Hager, Managing Partner
    Katarína  Majtásová, Senior Associate
    Petra Marková, Counsel
    Michal Růžička, Senior Associate
    Jan Kohl, Junior Associate

    This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full terms and conditions on our website.

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