In today's interconnected global economy, businesses must adeptly navigate the complex landscape of international, regional and local sanctions. Ensuring compliance with these sanctions is crucial for any company engaged in cross-border activities, including manufacturing, import, and export operations. By diligently monitoring national and international sanctions, businesses can assess and manage the associated risks and obstacles, ensuring adherence to applicable laws and regulations.
Sanctions can be imposed on countries, individuals, or companies for various reasons, such as human rights violations or threats to regional or international peace and security. These economic sanctions can affect different sectors and activities, including export or import bans and partial trade limitations. Financial sanctions, in particular, involve restrictions on capital flows and payment transactions, which may include asset freezes, financial transaction screening, or complete bans on financial interactions with the sanctioned target.

 Generally, EU sanctions apply within the EU and to EU nationals worldwide. They also extend to companies incorporated under EU law. For example, Article 13 of Council Regulation 883/2014 outlines the specific individuals and entities obligated to comply with that regulation and it specifies that legal entities, both within and outside the EU, must adhere to it if they are incorporated or constituted under the law of an EU Member State.
When EU companies establish foreign branches or subsidiaries, they must ensure these entities’ activities comply with EU sanctions. For example, a Turkish subsidiary of a German company, established under Turkish law, may undertake actions that qualify as EU sanctions circumvention, thereby potentially subjecting the German parent company to liability.

Decision

• To exercise the EU’s competence, EU institutions may adopt different types of legal acts. A decision is a legal act binding in its entirety. A decision which specifies those to whom it is addressed is binding only on them.
• A decision forms part of the EU’s secondary law. It is adopted by the EU institutions in accordance with the treaties.

Directive

• Directives form part of the EU’s secondary law. They are therefore adopted by the EU institutions in accordance with the treaties. Once adopted at EU level, they are then transposed by EU Member States so they become law in the Member States.
• However, it is up to each individual Member State to develop its own laws to determine how to apply these rules.
• A directive is distinct from a regulation or a decision because:
  
  • unlike a regulation, which is directly applicable in Member States after its entry into force, a directive is not directly applicable in Member States, it must first be transposed into national law before it is applicable in each Member State;
  • Unlike a decision, the directive has general application.

Regulation

Regulations are legal acts defined by Article 288 of the Treaty on the Functioning of the European Union (TFEU). They have general application, are binding in their entirety and are directly applicable in EU Member States.