Commodity traders face growing commercial and legal uncertainty as sanctions regimes diverge and restrictions change during deals, according to an HFW briefing reported by Hellenic Shipping News. The analysis says compliance has become a strategic issue for businesses handling oil, gas, metals and agricultural products, affecting their ability to secure finance, insurance and corporate backing.
HFW partner Daniel Martin and Amanda Rathbone, the firm's knowledge counsel for commodities, warn that exposure can shift between negotiations, shipment, financing and payment. They argue that established procedures cannot be assumed to remain adequate throughout a transaction, requiring businesses to reassess risks as both deals and restrictions develop.
A central challenge is the widening gap between US, EU and UK sanctions approaches towards countries including Russia and Iran. According to the briefing, a transaction allowed in one jurisdiction may be restricted or attract closer scrutiny in another. Countermeasures imposed by other states can further complicate compliance, potentially exposing businesses to conflicting obligations. Sanctions are also reaching beyond military, dual-use and advanced technology goods into more routine commercial trade.
The authors note that trading activity often shifts towards jurisdictions without comparable restrictions when European, British or American companies leave sanctioned markets. Such movement does not itself establish wrongdoing, they stress. However, businesses should examine changes in counterparties, ownership, routes, paperwork and payment arrangements for signs that intermediaries or opaque structures could be concealing a transaction's true nature.
Secondary sanctions present another significant threat. HFW says their consequences now extend beyond limiting non-US entities' access to American markets: those businesses may themselves become sanctions targets. The briefing describes potential designation as a threat to the survival of international traders, shipowners, insurers and banks, substantially changing the commercial assessment of affected opportunities.
HFW recommends looking beyond checks of immediate counterparties against sanctions lists. Reviews should establish ultimate control, goods' origins, transport arrangements and the involvement of financial and insurance institutions, alongside the rationale for a deal's structure. Technology can reduce false alerts, but difficult cases still need human judgement. The authors urge companies to begin this work during initial commercial assessments and expect continued divergence between regimes, greater attention to ownership and supply chains, and more sanctions disputes reaching courts.