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Article
Publication date: 7 September 2012

The purpose of this paper is to highlight some of the most significant US sanctions risks faced by persons that operate in the securities and investment marketplace, in order to…

204

Abstract

Purpose

The purpose of this paper is to highlight some of the most significant US sanctions risks faced by persons that operate in the securities and investment marketplace, in order to encourage firms to maintain comprehensive, risk‐based compliance controls that will strengthen their ability to comply with US sanctions regulations.

Design/methodology/approach

The paper begins with a brief overview of the sanctions programs administered by the US Treasury Department's Office of Foreign Assets Control (OFAC), followed by examples of potential sanctions violations that emphasize the risks and challenges faced by the securities and investment sector with respect to sanctions. Finally, the paper describes how firms can develop measures intended to mitigate their OFAC risk and prevent the potentially costly monetary penalties associated with violations of US sanctions regulations.

Findings

The nature of the securities and investment sector can make identifying the often indirect sanctions implications of engaging in certain activity a challenging task; however, a well thought out, responsibly implemented OFAC compliance program can help mitigate sanctions risks in an effective manner.

Originality/value

The paper provides insight regarding OFAC compliance in the securities and investment sector directly from the government agency responsible for administering and enforcing US sanctions.

Details

Journal of Investment Compliance, vol. 13 no. 3
Type: Research Article
ISSN: 1528-5812

Keywords

Expert briefing
Publication date: 18 June 2019

Sanctions outlook.

Details

DOI: 10.1108/OXAN-DB244587

ISSN: 2633-304X

Keywords

Geographic
Topical
Expert briefing
Publication date: 18 March 2020

International calls by aid groups for Washington to ease sanctions on Iran and to allow greater sales of goods to it, to help stem COVID-19, are growing. Under US law, countries…

Expert briefing
Publication date: 18 January 2016

Agreement between Iran and the P5+1 (France, Germany, the United Kingdom, Russia, China and the United States) on the former's nuclear programme in July 2015 has been heralded as…

Book part
Publication date: 21 October 2019

Beata Stępień and Patrick Weber

The probability of sanctions’ effectiveness increases not only due to their severity for the target country’s economy but is also a function of adherence to their principles by…

Abstract

The probability of sanctions’ effectiveness increases not only due to their severity for the target country’s economy but is also a function of adherence to their principles by enterprises from senders’ countries. Sanctions avoidance and increasing investments in the target country (the observed behavior of many companies facing the European Union (EU) sanctions against Russia which were imposed in 2014) mitigate the impact of these restrictive measures. In this chapter we show (by analyzing adaptation strategies of EU enterprises affected by sanctions imposed on Russia by EU) how particular types of strategies affect the effectiveness of sanctions and what factors determine the choice of their respective behavior. We draw our conclusions from the online survey of more than 1,000 responses from British, French, German, Italian, and Polish enterprises. We find that while administrative burdens make conformance to sanctions more likely, market dependency and non-tangible assets in the target country induce strategies that challenge sanction policies. We conclude that the EU–Russian sanctions dispute incentivizes European companies to increase their engagement in Russia. These so-called defiance strategies diminish the real economic effect of the sanctions and generate a new equilibrium which outlasts the lifting of these restrictive measures and has negative long-term political implications.

Details

International Business in a VUCA World: The Changing Role of States and Firms
Type: Book
ISBN: 978-1-83867-256-0

Keywords

Book part
Publication date: 15 July 2009

Maraike Wenzel and Sami Faltas

On December 24, 1989, an armed insurrection began in Liberia. Charles Taylor, a former government official, led a rebel force, the National Patriotic Front of Liberia (NPFL), into…

Abstract

On December 24, 1989, an armed insurrection began in Liberia. Charles Taylor, a former government official, led a rebel force, the National Patriotic Front of Liberia (NPFL), into the north-eastern Nimba County. A breakaway faction, the Independent National Patriotic Front (INPFL), led by Prince Yormie Johnson gained control of central Monrovia – the capital – and killed the President Samuel Doe. The Economic Community of West African States (ECOWAS) intervened in August 1990, sending monitoring troops (the ECOWAS Military Observer Group, ECOMOG), and convened a national conference which elected an Interim Government of National Unity. In October 1990, ECOMOG established a neutral zone in Monrovia where Dr. Amos Sawyer was installed as Interim President in November. Various different factions and opposition groups were formed and clashes between the rebel groups and the Liberian army continued.

Details

Putting Teeth in the Tiger: Improving the Effectiveness of Arms Embargoes
Type: Book
ISBN: 978-1-84855-202-9

Article
Publication date: 7 November 2023

Francisco Rodríguez

The use of economic sanctions has grown dramatically in recent decades. Nevertheless, many arguments are presented in the public policy space regarding their effects on target…

Abstract

Purpose

The use of economic sanctions has grown dramatically in recent decades. Nevertheless, many arguments are presented in the public policy space regarding their effects on target populations. The author presents the first systematic analysis of the effects of sanctions on living conditions in target countries.

Design/methodology/approach

This paper provides a comprehensive survey and assessment of the literature on the effects of economic sanctions on living standards in target countries. The author identifies 31 studies that apply quantitative econometric or calibration methods to cross-country and national data to assess the impact of economic sanctions on indicators of human and economic development. The author provides in-depth discussions of three sanctions episodes—Iran, Afghanistan and Venezuela—that illustrate the channels through which sanctions affect living conditions in target countries.

Findings

Of the 31 studies, 30 find that sanctions have negative effects on outcomes ranging from per capita income to poverty, inequality, mortality and human rights. The author provides new results showing that 54 countries—27% of all countries and 29% of the world economy— are sanctioned today, up from only 4% of countries in the 1960s. In the three cases discussed, sanctions that restricted the access of governments to foreign exchange limited the ability of states to provide essential public goods and services and generated substantial negative spillovers on private sector and nongovernmental actors.

Originality/value

This is the first literature survey that systematically assesses the quantitative evidence on the effect of sanctions on living conditions in target countries.

Details

Journal of Economic Studies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0144-3585

Keywords

Book part
Publication date: 9 June 2015

David Cadden

This chapter traces the history of animosity between the United States and Iran that characterizes the current relationship between the two countries which were once close…

Abstract

This chapter traces the history of animosity between the United States and Iran that characterizes the current relationship between the two countries which were once close diplomatic, economic, and political allies. The chapter identifies the various cultural, economic, and political factors that have contributed to the hostility between these two countries and focuses particularly on the UN and US sanctions that have been imposed on Iran because of its overt and covert nuclear programs. The chapter concludes with a discussion on how the lifting of sanctions might allow the United States and Iran to rebuild a strategic partnership.

Details

Reintegrating Iran with the West: Challenges and Opportunities
Type: Book
ISBN: 978-1-78441-742-0

Keywords

Book part
Publication date: 28 February 2022

Gregory DeAngelo, Michael D. Makowsky and Bryan McCannon

Law enforcement agents enforce rules that they might transgress in their private lives. Building from a theory of “hypocrisy aversion” where agents incur psychological costs from…

Abstract

Law enforcement agents enforce rules that they might transgress in their private lives. Building from a theory of “hypocrisy aversion” where agents incur psychological costs from imposing a sanction on others for rules that they might break, the authors design a two-player game in which players are simultaneously placed in the roles of enforcer and potential transgressor. In this model, discretionary enforcement is endogenous to the size of the sanction. Conditional on rewards to enforcement and punishment that are both sufficiently small in the status quo, the authors demonstrate that price effects can be dominated by second-order hypocrisy effects, leading to rates of transgression that increase with larger sanctions. The authors test the model within a laboratory experiment where individuals can simultaneously gamble at the expense of a third party and punish those they observe gambling. Examining the comparable testable predictions of models of (i) selfish agents, (ii) pro-social agents, and (iii) pro-social agents who are averse to hypocrisy, the authors find evidence of hypocrisy aversion in the rates of gambling, sanctioning, and the changing composition of agent strategies. Our results suggest that increasing sanctions can backfire in the deterrence of common criminal and non-criminal offenses.

Details

Experimental Law and Economics
Type: Book
ISBN: 978-1-83867-537-0

Keywords

Book part
Publication date: 24 November 2017

Anna Abramova and Olga Garanina

Economic sanctions imposed by the EU and United States on Russia have brought significant changes into Russian foreign economic policy, in particular leading to deepening…

Abstract

Purpose

Economic sanctions imposed by the EU and United States on Russia have brought significant changes into Russian foreign economic policy, in particular leading to deepening cooperation with Asian countries and China in particular. The present contribution aims to shed light on the influence of sanctions on Russian multinational enterprises (MNEs) internationalization toward China using the example of energy and information and communication technology (ICT) industries.

Methodology/approach

The chapter builds on case study analysis. The choice of sectors allows us to highlight the recent strategic trends in the internationalization of oil and gas industry, dominated by state-owned multinationals, and in ICT by privately owned companies.

Findings

Our results provide empirical data for understanding the influence of sanctions on MNEs from the country being under the sanctions. In the case of Russian oil and gas industry and ICTs, research indicates that the shift toward China was not initiated primarily by the sanctions. In both cases, expansion to Asian markets was correlated with business interests in the Chinese market. However, changes in geopolitical and macroeconomic business environment accelerated Russian MNE’s pivot to China, for the purposes of attracting capital and reaching new markets in context of deteriorating relations with western partners. The cases demonstrate a moderating role of the industry in the context of sanctions, helping compensate for the slowdown of economic relations with traditional partners.

Originality/value

The novelty of the chapter is to delineate the consequences of sanctions on MNEs from the country being under sanctions. In this way, it illustrates the role of geopolitical environment in intensifying internationalization of Russian MNEs toward China.

Details

The Challenge of Bric Multinationals
Type: Book
ISBN: 978-1-78635-350-4

Keywords

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