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Sanctions overview

What are sanctions?

Sanctions are measures to restrict / inhibit trade and can comprise restrictions in relation to financial activity (including asset freezes and measures targeted at restricting or limiting the financial activity of a sanctioned entity or individual); trade (such as levying import duties, restricting exports or blocking ports); military embargoes; immigration restrictions; transport restrictions (including restricting the use, ownership and registration of specific transport assets such as ships and aircraft); sporting activity; and diplomatic activity (including closing embassies or cancelling government meetings or tours).

What are the key sources of sanctions?

Both individual countries and supra-national organisations pass sanctions measures. Key sources of sanctions measures include the United Nations; the European Union; the USA; and the UK.

How do sanctions operate?

Sanctions can be imposed in respect of specific territories; entities and/or individuals and can be targeted to specific restrictions of the types described above or be more general in nature. Sanctions regimes and the specific targets of sanctions can change quickly, often daily, so obtaining up-to-date information is crucial. Breaches of sanctions regimes can carry significant criminal and/or civil penalties and consequences.

How might sanctions be relevant to private equity and venture capital firms?

BVCA member firms could face sanctions issues in a number of different contexts. Firms should consider potential:

  • investor-level issues (for example, existing or prospective investors subject to sanctions);
  • direct exposures (where a member firm has offices in a jurisdiction which is or may become subject to sanctions);
  • portfolio-level issues (such as restrictions on entering into new transactions in respect of assets subject to sanctions or with counterparties to sanctions; asset freezes impacting portfolio companies; and
  • other issues impacting portfolio companies trading with territories, entities or individuals which may be subject to sanctions).

Firms should also be alive to the impact of specific financial sanctions: for example, in relation to certain derivative or foreign exchange exposures.

Where can I find out more?

Given the complexity and fast-developing nature of sanctions programs and the potentially very significant adverse consequences of breaches, it is important to seek up-to-date information and professional advice on the potential applicability of international sanctions regimes. Some key primary source of information on current sanctions programmes can be found below:

Further information


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