Trade Finance Under Fire? Exploring the Impact of Sanctions
Sam Fowler-Holmes and Geoffrey Wynne have authored an article, "Trade Finance Under Fire? Exploring the Impact of Sanctions," published by WorldECR in April 2022.
The article highlights how, despite navigating the matrix of domestic and international sanctions legislation, rules and guidance on a daily basis, the breadth and speed of the sanctions being implemented by authorities across the globe in light of the Russian invasion of Ukraine has posed a challenge for even the most seasoned members of the trade finance industry.
Examining the direct and indirect impact of sanctions the article looks at the challenges faced in assessing the impact of sanctions, the ways they can affect a supply chain and how the consequences of the application of sanctions on transactions can be difficult to assess. The authors look at how the indirect impact of sanctions can take many guises: the impact of a trader being prevented from buying goods, sellers not being able to perform under a sale contract, and how the doctrine of force majeure and frustration may potentially offer some protection for traders, despite the former of these requiring a contractual force majeure clause.
The article touches the many financiers and traders that are taking steps to distance themselves from connections with Russia, which in turn is putting pressure on the supply chain, as alternative arrangements are sought. In looking for solutions to the changes being faced by the industry, the article also looks at how parties may be able to protect themselves within the terms of their contracts, as well as providing a reminder "if one was needed, of the importance of careful consideration of contractual terms at the outset, rather than at the time a problem arises."
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