US Sanctions Against Financial Companies: Key Features

Abstract

Sanctions constitute one of the most demanded instruments of the U.S. foreign policy agencies in affecting foreign adversaries. The use of sanctions is also a challenge for commercial companies, given the growing use of financial sanctions and enforcement measures by the U.S. government. Banks have been increasingly vulnerable to these risks; they are among the most frequent targets of restrictive and enforcement measures by the U.S. and tend to pay much more in comparison with other sectors in terms of financial penalties. This study is based on the analysis of 54 cases of US financial penalties against banks as well as individual cases of US sectoral and blocking sanctions. The article aims at understanding the reasons why this type of financial organizations is vulnerable to US sanctions, the key features of US sanctions against them, and possible application of US sanctions in this direction in the future. The results of the study demonstrate that the heightened sanctions risks that banks face are attributed to their functional connections with the governments under sanctions, the nature of banking business and some intraorganizational factors. Moreover, the inclination of financial companies pressured by sanctions to accept requirements of the U.S. indicates the effectiveness of application of sanctions against commercial ventures.

Keywords

• sanctions
• secondary sanctions
• banks
• sanctions risk
• sanctions compliance