Sanctions Update: Breaching Sanctions-The Consequences

Analysis

The extensive utilisation of sanctions as a foreign policy tool is a comparatively recent development in the European Union. As such, there are limited examples of enforcement actions taken against those who breach sanctions, whether deliberately or accidentally. This is in contrast to the United States, where there is a history of enforcement actions going back many years, with significant fines being imposed on violators responsible for multiple breaches. These have included fines against European banking groups in 2010 of USD $176 million, and in 2009 of USD $536 million and USD $217 million. Such fines are often accompanied by a requirement for enhanced compliance to be carried out by the offending company. However, evidence suggests that the UK Government is now taking enforcement more seriously. In March 2012 it was announced by HM Revenue and Customs that 84 British companies had been found to have breached the Iranian sanctions regime during the financial year, in comparison with just 40 cases in 2008/09, and 64 and 65 cases in the following two years.

How do governments monitor compliance with sanctions?