Sanctions and Export Controls

 
 
 

We are committed to ensuring that our business is conducted in compliance with all applicable sanctions and export control regimes, and that we do not engage in any transactions where it is prohibited to do so.

Sanctions prohibit nearly all direct and indirect activities and transactions with Sanctioned Territories and Sanctioned Parties if such conduct is within the jurisdiction of the relevant government authority. We operate worldwide and are subject to several sanctions regimes, which may differ in their scope, jurisdiction, and restrictions.
Under certain circumstances, a Group Company may lawfully do business with a Sanctioned Territory or Sanctioned Party; however, such business must be approved by Legal Affairs in writing after thoroughly conducting the requisite analysis.
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  • Awareness of, and Compliance with, Sanctions and Export Controls
  • Steps to Ensure Full Compliance
 

Awareness of, and Compliance with, Sanctions and Export Controls

We must be aware of, and fully comply with, all applicable sanctions regimes and export controls affecting our business. We must ensure that we never directly or indirectly:
  • supply our products or services, or allow our products or services to be supplied, to any person;
  • purchase goods or services from any person; or
  • otherwise deal with any person or property in contravention of any applicable sanctions, trade embargo, export controls or other trade restriction.

Sanctions may be imposed by individual countries, such as the US or UK, or supranational bodies, such as the UN and EU.

Sanctions do not just target whole countries with economic, trade or diplomatic restrictions. Increasingly, they capture direct or indirect dealings with sanctioned individuals, companies, organizations and groups located worldwide and sanctioned for a variety of different policy reasons. Some sanctions target dealings with particular industry sectors.

Some sanctions regimes are very broad; for example, US sanctions can apply even to non-US persons, such as BAT, when acting entirely outside the United States. In particular, US sanctions prohibit the use of US dollars and US banks even for payments between non-US parties involving  Sanctioned Territories or Sanctioned Parties, as well as exports/re-exports/transshipments of US-origin products and products with US-origin content to or for Sanctioned Territory or certain Sanctioned Parties. Even where there is no US nexus, the US Government can and does impose retaliatory sanctions on persons it considers to provide material support for Sanctioned Parties.

Separate from sanctions, export controls impose licensing obligations on the cross-border movement of certain types of items. Where export controls apply to a particular item, we must always ensure that we have the appropriate license (s) in place before exporting it.

Breaching sanctions and export controls carries serious penalties, including fines, loss of export licences and imprisonment, for individuals, in addition to significant reputational harm.

Our vendors can also restrict us from using their products and services in connection with or from Sanctioned Territories, even if lawful for the Group.

 

Steps to Ensure Full Compliance

In line with the Sanctions Compliance Procedure, Group Companies’ and business units’ internal controls must minimise the risk of breaching sanctions and export controls, and provide training and support to ensure that Employees understand them and implement them effectively, particularly where their work involves international financial transfers or cross-border supply or purchase of products, technologies, or services.

The list of Sanctioned Territories and Sanctioned Parties changes frequently. If our work involves the sale or shipment of products, technologies or services across international borders, we must keep up-to-date with the rules and at all times fully comply with our Sanctions Compliance Procedure.

Despite sanctions being in place, exceptions exist and it can still be lawful for us to engage in business that directly or indirectly involves or benefits a Sanctioned Territory or Sanctioned Party. However, the legal analysis is complex and we must also take into account broader risk considerations, so legal approval is required before we conduct any business involving a Sanctioned Territory or Sanctioned Party. We must also consult with Legal Affairs where there are red flags for a transaction that may involve a Sanctioned Territory or Sanctioned Party.

All Group Companies must follow the M&A Transactions Compliance Procedure.

We must also notify our local Legal Counsel immediately if we receive any sanctions-related communications or requests from official bodies or our business partners (including our banks). Our banks (and other vendors) often have expectations beyond the law which we address through our transparency requirements. We must ensure that we are transparent with our banks and other business partners about whether we intend to involve them in activities that are sanctions sensitive. In particular, we must never hide or disguise the fact that a particular business activity is sanctions sensitive.

For more information on sanctions and measures we take to mitigate these risks, see the Sanctions Compliance Procedure.

 

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