A straightforward explanation of how sanctions work, the ways in which they may impact your business and why it’s important to understand them.

When running a business, it’s important to understand your obligations in relation to domestic and international sanctions before entering into arrangements with offshore customers and/or their agents.

If you’re involved in any of the following transactions, you’re at risk of a sanctions violation:

• You make a payment directly to someone who is subject to a sanctions program.
• You make a payment to someone in a country subject to sanctions, even if their account is located in a non-sanctioned country.
• The movement of funds and/or goods in your transaction involves a party who is subject to sanctions (for example airlines, banks, shipping vessels and ports).
• The ultimate recipient of your goods/service may be subject to sanctions despite you only dealing with a non-sanctioned intermediary.

What is a Sanction?

Sanctions are utilised by government(s) as a non-violent foreign policy in deterring financial crimes, human rights abuses, terrorism, cybercrime, corruption, and nuclear weapons proliferation. Sanctions are designed to influence and target countries, governments, individual people, legal entities, or other organisations.

Sanctions can also 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 a person subject to sanctions (Designated Entity or Person).
• Freezing the assets of a Designated Entity/Person or resident of a sanctioned country.
• Prohibiting particular types of activities, such as the export of particular goods to sanctioned countries, e.g. military and dual use goods, advanced technology.
• Other financial and diplomatic restrictions.
• Complete embargoes which restrict almost all commerce with a sanctioned country.

For further information about NAB’s Sanctions Program please review a summary (available here NAB Sanctions Program) or speak to your Business Banker if you need further information.