Due diligence for compliance with commodity sanctions – a key challenge for exporters and importers

Compliance with international commodity sanctions, especially in the context of trade with restricted countries such as Russia, is a challenge that requires businesses to pay exceptional attention and implement advanced due diligence procedures. Neglecting this duty can lead not only to financial risks, but also to legal and reputational consequences.

Why is due diligence crucial?

Sanctions are designed to limit the economic opportunities of those subject to restrictions, but they also affect companies engaged in legitimate international trade. For example, European Union exporters, when carrying out transactions in high-risk regions, need to ensure that they are not contributing to the circumvention of sanctions.

As the European Commission points out, attempts to circumvent sanctions through the use of complex financial schemes, falsification of trade documentation or the use of intermediaries from third countries have recently increased. As a result, traders are obliged to implement enhanced due diligence procedures.

Key elements of due diligence

1. Identification of threats and risks:
   • Identification of techniques to circumvent sanctions, such as changing the country of destination or false classifications of goods.
   • Analysis of transactions for compliance with regulations, particularly regarding dual-use goods.
2. Analysis of business partners:
   • Verification of the beneficial owners and ownership structure of business partners.
   • Verification that partners are not associated with sanctioned entities.
3. Monitoring of financial and logistical flows:
   • Analysis of the transport route and destination of goods.
   • Identification of unusual transport patterns that may indicate an attempt to circumvent sanctions.
4. Implementation of procedures and clauses in contracts:
   • Adding clauses prohibiting further exports of goods to sanctioned countries.
   • Conduct regular audits to verify contractor compliance with these requirements.
5. Education and knowledge update:
   • Regular training for employees on current legislation and changes in sanctions regulations.
   • Monitoring new sanctions circumvention schemes published by the European Commission and national supervisory authorities.

Challenges for Polish entrepreneurs

The Polish Sanctions Act additionally imposes obligations related to compliance with international sanctions. Exporters and importers must therefore adapt their procedures to both EU and national regulations.

Summary

In the face of increasing restrictions and sophisticated methods of circumventing them, due diligence has become a key element in international trade risk management. Businesses that implement effective procedures and systematically monitor their activities not only protect their companies from legal risks, but also build trust in their business relationships.

If you have questions about the implementation of due diligence procedures in your company, please contact our experts – we will be happy to assist you in adapting your processes to legal requirements.