International sanctions: integrating geopolitical risks into your compliance strategy

Contents

Coping with geopolitical chaos
International sanctions: what are we talking about?
Focus on Russia: what are companies' obligations?
Filtering, freezing assets, export control: points to watch out for
Best practices for compliance

Coping with geopolitical chaos  

We have rapidly evolved from a world known as VUCA - volatile, uncertain, complex and ambiguous - to a BANI world, even more fragile, with regular crises and consequences that are difficult to anticipate. Armed conflicts, international sanctions that are difficult to interpret, trade restrictions and political developments make markets unpredictable, multiply cross-border fraud and undermine supply chains, while impacting all corporate departments. Every transaction can be exposed to a major legal or financial risk. In this context, it is no longer enough to simply react: integrating the geopolitical dimension into compliance strategy and continuously assessing risk exposure are becoming essential. This means implementing proactive, automated and resilient practices to guarantee operational agility and long-term viability. 

International sanctions: what are we talking about?  

International sanctions are coercive measures imposed by States or international and regional organizations (UN, EU, ECOWAS). Their aim is to maintain peace, protect security and punish behavior deemed illegitimate. In France, their application is overseen by the Ministry of the Economy and Finance and Customs. 

International sanctions can be economic, diplomatic, military or symbolic. They can be general against a country or state, or targeted against certain individuals, products or sectors of activity.  

1. On the trade front, they take the form of trade restrictions, embargoes on strategic products such as energy and weapons, asset freezes and bans on financial transactions.  

2. They can also take on a diplomatic dimension. This involves reducing or suspending bilateral relations, recalling ambassadors or closing down official representations.  

3. Some sanctions are military in nature. They consist mainly of arms embargoes, but can also include support for armed intervention.  

4. Finally, symbolic sanctions are used, for example, to ban certain personalities or groups of people from travelling, to pronounce public condemnations, or to exclude a country or its representatives from major competitions and international events.   

Non-compliance exposes you to financial, legal, operational and reputational risks: 

• Fines and asset freeze. 

• Criminal and civil proceedings against the company and its directors. 

• Denial of access to certain markets and loss of licenses. 

• Loss of partner and customer confidence, brand damage. 

• Increased operational complexity, with tighter controls on transactions and internal compliance. 

The extraterritorial effect of the Sapin II law means that corruption committed abroad can be prosecuted in France. It requires companies to set up risk mapping, a code of conduct, control procedures and internal alert systems, as well as procedures for evaluating third parties. These mechanisms are designed to prevent not only corruption, but also breaches of embargoes, trade restrictions and asset freezes. 

Focus on Russia: what obligations do companies have? 

Since the annexation of Crimea in 2014 and the invasion of Ukraine in February 2022, sanctions imposed on Russia by the EU, US and Canada have affected all levels of activity: asset freezes by the Russian Central Bank, banking exclusion from the SWIFT system, export restrictions on sensitive technologies (semiconductors, electronics), oil and gas embargoes, and individual sanctions for over 1,700 people and 420 entities, including Vladimir Putin. 

For any company, whether operating in Russia, maintaining commercial relations with Russian partners or operating in an international context, the impact is tangible: suppliers unable to deliver, an inaccessible distribution network, markets at risk, and economic uncertainty affecting planning and competitiveness. It is therefore essential to check compliance before any transaction, and if necessary to seek authorization from the relevant authorities (DG of the Treasury). 

Screening, asset freeze, export control: points to watch out for 

The compliance officer must anticipate and continuously assess risk exposure, while continually juggling regulations and business performance. Three points of vigilance are particularly sensitive in managing the geopolitical dimension: transaction screening, asset freezing and export control.  

• Transaction screening: systematically check customers, suppliers and partners against sanctions lists, PEPs (Politically Exposed Persons) and high-risk countries. 

• Asset freeze: rapidly identify funds or assets linked to sanctioned entities and block any prohibited transactions. 

• Export control: control transfers of sensitive products and technologies, obtain the necessary licenses and document authorizations. 

Best practices for compliance  

International sanctions are a major risk for any global company. Incorporating them into compliance procedures is not just a legal obligation: it's a strategic necessity to protect business and reputation. To remain effectively compliant, it is essential to automate screening and monitoring of third parties, maintain continuous legal intelligence and document every decision. AP Scan does just that: the solution centralizes the management of AML-CFT and KYC obligations, connecting to over 50 databases (international sanctions, PEP, RCA, adverse media, Open Data) to offer real-time risk monitoring. The complementary AP Scoring and AP Filter solutions go even further: AP Scoring automatically assesses the risk level of partners and customers, while AP Filter instantly detects sanctions and embargoes. Finally, AP Monitoring ensures continuous, automated monitoring of financial flows and atypical transactions, in compliance with the permanent vigilance obligations imposed by regulators. This enables the compliance officer to intervene quickly, make informed decisions and secure transactions without slowing down operations.