Support of Transactions in Order to Avoid Sanctions
Legal support of transactions under sanctions restrictions
Sanctions affect not only foreign economic activity, but also transactions concluded between residents of the Russian Federation. This is due to the fact that almost all branches of business activity have felt the impact of the imposed sanctions. The imposed sanctions have led to the fact that some businessmen simply left Russia, some stopped cooperating with Russian business, some have to receive deals with Russian partners from parent organizations, and some entrepreneurs find themselves in a disadvantageous position due to the inability to fulfill obligations under contracts.
Restrictions in the banking system also affected the interaction of the parties. But despite the restrictions being introduced, entrepreneurs find a way out of the current situation and practically do not reduce commercial activity, however, the business community has to revise the contracts concluded, as well as adjust the concluded contracts in accordance with the sanctions restrictions.
The number of sanctions imposed changes almost daily, but businesses have to exist in modern realities and adapt to the prevailing circumstances. Taking into account the imposed sanctions, recommendations from lawyers have appeared in the legal field to reduce the risk of entrepreneurs, and for already concluded and existing contracts, it is recommended to revise and include a sanctions clause in the terms of contracts. Such a clause will allow business in the event of the introduction of sanctions, to terminate the contract with the least losses. At the same time, it is important for entrepreneurs to respond in time to the restrictions introduced, with a view to the possible termination of contracts in order to avoid adverse consequences.
The work of entrepreneurs under sanctions restrictions implies the emergence of possible additional risks that may arise after the conclusion of the contract and lead to the following adverse consequences:
- Application of penalties by the counterparty.
- Inclusion in the sanctions lists, which will lead to the impossibility of further cooperation.
- Termination of access to the market of a certain industry, etc.
It is important to note that it is often almost impossible to take into account all possible circumstances that may arise under sanctions restrictions for businesses on his own, without experience in interacting with counterparties in such conditions. To solve this problem, entrepreneurs involve qualified lawyers with experience in preparing transactions under the conditions of the imposed restrictions. The qualifications and experience of the lawyer accompanying the transaction, as a rule, allows for the maximum possible risks and reflect in the terms of the contract all the necessary conditions for this. At the same time, legal support of transactions under the conditions of sanctions restrictions is a certain procedure that allows minimizing the risks of entrepreneurs:
- Collection of information about the transaction planned for conclusion.
- Verification of the counterparty against sanctions lists.
- Negotiating with future contractors and determining the main terms of the contract planned for conclusion.
- Preparation of the text of the contract, taking into account the agreed main conditions, as well as the inclusion of a sanction clause in the text of the contract.
- Direct conclusion of the contract.
A large number of sanctions imposed in a fairly short time has led many entrepreneurs to situations where the fulfillment of obligations under contracts has become impossible or possible, but with large financial losses. This practice has affected almost all business sectors, while even the introduction of sanctions clauses into the texts of contracts did not always have a positive effect. In this context, it is important to note that the formation of a sanctions clause in the legal field has not yet been completed, the more sanctions are introduced, the more circumstances must be included in the section of the contract related to the restrictions being introduced. At the same time, when a sanctions clause is included in the text of an agreement, entrepreneurs often refer to the imposed restrictions as force majeure circumstances. It is important to note that the jurisprudence in this matter is still being formed and is not always unambiguous, in this regard, the participants in the dispute will have to prove that the parties to the contract really could not have foreseen such circumstances at the time of the conclusion of the contract, and if they occurred, they took all measures to notifying the counterparty of adverse events that have occurred.
Taking into account the increasing pressure from foreign organizations and states in the form of sanctions restrictions, business even in the face of severe limitations.
- Advising on business activities under sanctions
- Preparation and legal support of transactions
- Checking counterparties for inclusion in the sanctions lists
- Legal representation on conclusion of transactions under sanctions