As an air charter broker providing international flights, sanctions are an increasingly important risk to be avoided at all costs. Sanctions can affect your ability to conduct future business and can result in significant criminal, financial and reputational damage.

Here are ten specific areas of business risk in relation to sanctions when arranging air charters:

1. Sanctions on countries: There are specific countries that are subject to restrictions or embargoes by various bodies including the United Nations, The EU and the US Office of Foreign Assets Control (otherwise known as OFAC) Doing business with these countries can result in a breach of sanctions which carry significant criminal, financial and reputational damage to business. Air charter brokers providing transport to a company located in an embargoed country would be an example of such a breach and highlights a need for screening and due diligence when arranging international shipments.
2. Sanctions on individuals and entities: Sanctions may be imposed on certain individuals or on entities. This makes it illegal to do business with them. Again, arranging to transport such people would result in a violation of sanctions. There is a significant risk to business by not screening and performing diligence on passengers.
3. Sanctions on Goods: These sanctions can prohibit or restrict the transport of certain goods to or from some countries. These restrictions can be on any items specific to a country but often include items of a military nature, components for IT / technology and luxury goods.
4. Re Export Controls: In addition to the restrictions on goods themselves, you may also need to consider the possibility of sanctions on the re-export of goods to certain countries. An example of this would be where there may be a request to arrange an air charter to transport goods to a country that is not under sanctions, but those goods are intended to be re-exported to a sanctioned country.
5. Sanctions on vessels: Aircraft and their owners can have sanctions restrictions imposed upon them, so it is wise to include such checks on these in due diligence process.
6. Third Party Sanctions: Sanctions may also be imposed by third party organisations such as the UN or by third party countries. This poses increased risk for charter requests to or from those third party countries where restrictions exit and these should be considered as early as possible in the checking process.
7. Destination Risks: Sanction risks vary according to country but equally, some countries may impose additional regulation and/or sanctions. Checks should be made, even for non-sanctioned countries, to ensure that there are no further country restrictions on specific types of goods being transported.
8. Sanctions on Payments: Sanction can often be financial and may impact upon payment methods. Prohibited payment methods can lead to a breach of sanction. Verification of payment method, currency and a review of financial restrictions remains more imperative than ever when dealing with financial institutions for inbound and outbound funds.
9. Money Laundering: Sanctions are increasingly used to prevent money laundering. Financial institutions such as banks are particularly sensitive to this and are rigorous in their regulatory checks. Business must keep apace with this and perform the necessary checks in advance of a payment reaching the bank.
10. Compliance Programme Risk: Sanctions violations are serious and can lead to significant penalties. If a company is found not to have a compliance programme or is found not to have performed adequate levels of diligence, these penalties may be even higher and the consequences more severe.

With over 40 years of experience in the practicalities of building compliance frameworks in the aviation and logistics sector, we understand the unique challenges and vulnerabilities that your business faces. We take a personalised approach to risk management and work with the industry to build robust risk-based understanding and programmes which allow the commercial operation to flourish as safely as possible.

Our services are available to all aviation and logistics sector businesses, including freight forwarders, GSAs, airline operators, cargo consolidators, and warehouses. Whether you are transporting passengers or cargo, our experienced team can help you navigate the intricacies of the industry.

Contact our founders below today to learn more about how we can help you mitigate risk and grow your business safely and successfully in today’s challenging world.