Navigating the Currents of US and PRC Sanctions: Compliance and Best Practice for Financial Institutions

As current tensions between the PRC and the U.S. have evolved beyond mere contradictions to a deep distrust, geopolitical considerations have been thrust to the forefront of compliance concerns for multinational businesses and financial institutions operating across Asia Pacific and globally.  The U.S. has demonstrated its commitment, during the Trump and Biden Administrations, to utilize economic and trade sanctions as a way to further its foreign policy objectives; to protect its national security; and to defend against what it deems to be threats to international peace and stability.

Other countries and international organizations (such as the United Nations Security Council) also have well-established sanctions regimes to target human rights violations, international terrorism; nuclear proliferation; and drug trafficking.  However, the U.S. stands out in its use of "long arm" jurisdiction to impose sanctions upon foreign countries, entities, and individuals.  More recently, the COVID-19 pandemic has deepened the resolve of the Biden Administration to utilize such policy measures to protect U.S. supply chains, and to restrict the export and re-export of its sensitive technologies to strategic competitors such as the PRC.

… the various U.S. sanctions imposed against the PRC, as well as the countering foreign sanctions measures issued by the PRC against the U.S., have since 2019 become a prominent feature of the global geopolitical landscape