Partner Giovanna Cinelli was quoted in an Export Compliance Manager article highlighting key steps for companies complying with rapidly escalating sanctions.
In the piece, Giovanna stressed that complying with multilateral sanctions across jurisdictions requires a diligence process that considers more than just one set of laws and regulations. According to her, this results in supply chain diligence taking on a more multilateral framework. “Current supply chain diligence has become more complicated,” she said.
Commenting on The Office of Foreign Assets Control’s (OFAC) 50% Rule—where an entity that is not on a sanctions list is subject to sanctions based on ownership by one or more sanctioned parties—Giovanna noted that its lack of transparency creates foundational compliance challenges. “Since OFAC does not designate, as specifically designated nationals (SDNs), those parties that are owned 50% or more by an SDN, companies are left to identify resources that can provide that data,” she observed.
For companies looking to pull out of business due to sanctions concerns, Giovanna advised that terminating contracts should be done with care and warned that while options exist for deciding when and how to suspend or terminate contract performance, “an incomplete analysis of the potential consequences can result in litigation and other regulatory impacts.”