In today's world of global trade and international transportation, companies face growing challenges related to geopolitical tensions and economic constraints. The issue of interaction with payment systems in the context of secondary sanctions is becoming particularly relevant. How to ensure the continuity of financial transactions and avoid blocking during the transportation of goods? Let's look at the key aspects of this problem and possible ways to solve it.
Understanding secondary sanctions
Secondary sanctions are a mechanism of pressure on third countries and companies cooperating with sub-sanctioned entities. Their goal is to expand the effect of primary restrictions, creating risks for those who continue to do business with sanctioned organizations or states. For the transport sector, this means increased attention to sources of financing, routes and contractors.
Risks for transportation market participants
Logistics companies and carriers find themselves at particular risk for several reasons:
- The global nature of the activity.
- Interaction with a variety of contractors.
- The need for cross-border payments.
- Work in various jurisdictions.
Blocking accounts or refusing to conduct transactions can lead to serious disruptions in supply chains and financial losses.
Risk minimization strategies
Diversification of payment instruments
The use of multiple payment systems and correspondent banks reduces dependence on a single financial institution. It is recommended to build relationships with banks of different jurisdictions, taking into account their approach to sanctions policy.
Careful selection of partners
Conducting a high-quality selection of contractors is becoming critically important. It is necessary to assess not only their financial situation, but also potential sanctions risks. Regular monitoring of changes in the status of partners will help to respond to emerging threats in a timely manner.
Using alternative currencies
Reducing dependence on the US dollar and the euro may reduce the likelihood of falling under secondary sanctions. Consider making payments in the national currencies of the partner countries or using digital assets.
Structuring transactions
Proper legal registration of contracts and the choice of optimal delivery terms (Incoterms) will help minimize the risks of blocking payments. Consultations with experts in international law and compliance are necessary to develop effective work schemes.
Technological solutions
Blockchain and Smart contracts
Distributed ledger technology opens up new opportunities for conducting secure and transparent transactions. Smart contracts allow you to automate the fulfillment of the obligations of the parties, reducing the risks of third-party interference.
Corporate Treasury systems
The introduction of advanced solutions for managing the company's financial flows helps to optimize calculations and increase the effectiveness of control over the movement of funds. This is especially important when working in difficult geopolitical conditions.
Local payment systems
The development of national payment systems (for example, Mir in Russia or UnionPay in China) creates alternative channels for conducting transactions. Integration with such systems can be an important element of a risk diversification strategy.
Compliance and transparency
Strengthening internal control
The creation of an effective compliance system is a key factor in protecting against sanctions risks. This includes:
- Develop clear policies and procedures.
- Staff training.
- Implementation of automated transaction screening systems.
- Regular audit of business processes.
Openness and communication
Maintaining transparent relationships with partner banks and regulators helps to reduce the level of suspicion towards your transactions. Be prepared to provide comprehensive information about the structure of transactions and sources of financing.
Regional features
When building a strategy to protect against secondary sanctions, it is necessary to take into account the specifics of different regions:
Asia-Pacific region
The growing economic power of the Asia-Pacific countries opens up new opportunities for diversifying financial flows. Special attention should be paid to the development of relations with banks in China, Singapore and Hong Kong.
The Middle East
The Gulf states, which have experience working under sanctions pressure, can become important partners for companies looking for alternative financing routes.
Latin America
The developing economies of the region offer interesting opportunities for building new trade and financial ties that are less dependent on traditional Western institutions.
Navigating the world of secondary sanctions requires a comprehensive approach and constant adaptation to changing conditions. Key elements of a successful strategy include:
- Diversification of financial instruments and partners.
- Implementation of advanced technological solutions.
- Strengthening internal control and compliance.
- Flexibility in the choice of currencies and payment methods.
- Taking into account regional specifics when building business processes.
Companies that are able to effectively manage sanctions risks will gain a significant competitive advantage in the global transportation market. Constant monitoring of the geopolitical situation and readiness for rapid adaptation will be the key to success in this difficult but promising area.
